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A Pizza Monopolist Employing Third-Degree Price Discrimination Charges Students $10

Question 128

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A pizza monopolist employing third-degree price discrimination charges students $10 per pizza and everyone else $15 per pizza. Students must show their ID before they can get the discount. The marginal cost of this monopolist is $5 whether or not the customer is a student. The elasticity of demand for the students is _____ and for everyone else it is _____.

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The Lerner index implies (P - ...

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