Price discriminates then at the profit maximizing prices

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Reference no: EM131092483

The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets of out-of-town skiers is given by Qo = 600 - 10 Po, while the demand for ski tickets of local skiers is given by Ql = 600 - 20 Pl . The marginal cost of servicing a skier of either type is $10. If Snow City Ski Resort (third-degree) price discriminates then at the profit maximizing prices, the price elasticity of demand is:

1. -3 for local skiers

2. -1.4 for out-of-town skiers

3. the same for local skiers and for out-of-town skiers

4. None of the above

Reference no: EM131092483

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