A Careful Analysis of Demand for Bubbles in Strasburg, North

question 25

Multiple Choice

A careful analysis of demand for Bubbles in Strasburg, North Dakota, reveals a strange segmentation in the market. (Recall Bubbles is the beverage which produces an unexplained craving for Lawrence Welk's music. It is produced by the process Q = min{ , W}, where R is the number of pulverized Lawrence Welk records and W is gallons of North Dakota well water. P_R = $1, P_W = $4.) If demand for Bubbles by senior citizens is described by while demand by those under 65 years old is Q_y = 50P^-4, how should Bubbles be priced to maximize profits?

• A) $12 for senior citizens and $32 for those younger
• B) $12.57 for all citizens of Strasburg
• C) $24 for senior citizens and $10.67 for those younger
• D) $8 for senior citizens and $21.33 for those younger
• E) $48 for senior citizens and $21.33 for those younger

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