A downtown bar serves a drink that UCSB students love. The profit-maximizing owner knows that any given student has a demand for drink given by p= 14 -q and a non-student has demand p = 6- q. Because the bar can't identify whether a customer is a student, she decides to sell drinks in packages. She offers a large package of 12 drinks and a small package of 4 drinks, and each student is only allowed to buy one package. Resales are strictly prohibited. The bar's marginal cost is 2. If both packages are offered and priced optimally, what is the minimum surplus students must get from the large package in order to not want to buy the small package? O a. 64 O b. 32 O C. 26 O d. 80

A downtown bar serves a drink that UCSB students love. The profit-maximizing owner knows that any given student has a demand for drink given by p= 14 -q and a non-student has demand p = 6- q. Because the bar can't identify whether a customer is a student, she decides to sell drinks in packages. She offers a large package of 12 drinks and a small package of 4 drinks, and each student is only allowed to buy one package. Resales are strictly prohibited. The bar's marginal cost is 2. If both packages are offered and priced optimally, what is the minimum surplus students must get from the large package in order to not want to buy the small package? O a. 64 O b. 32 O C. 26 O d. 80

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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