The Price Elasticity of Demand for Senior Citizens Purchasing Coffee

question 116

Multiple Choice

The price elasticity of demand for senior citizens purchasing coffee from McDonald's is -5 while non senior citizens have a price elasticity of demand equal to -1.25.If is cost McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for senior citizens and resultant marginal cost under third-degree price discrimination are, respectively,

• A)$0.016 and $0.20.
• B)$0.02 and $0.80.
• C)$0.025 and $0.02.
• D)$0.10 and $0.02.

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Definitions:

Research Hypotheses

Research hypotheses are statements made by researchers that propose a relationship or difference between variables, to be tested through experimental or observational study.

Statistical Hypotheses

Statements made about the relationships between variables, specifically in terms of whether a statistical relationship exists in the population that can be tested.

Data Analysis

The process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making.

Probability

A measure of the likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.