A firm has capacity limitations and charges $30 for its service during daily peak times.If the market demand elasticity drops from −3 during peak times to −5 at off-peak times,how much should the firm charge to earn the maximum profit during off-peak times?
A) $20
B) $21
C) $24
D) Not enough information to determine

Question

Quizplus · Accepted Answer

The information provided does not include the cost structure of the firm or how the price elasticity of demand directly affects the firm's pricing strategy to maximize profit, making it impossible to determine the correct off-peak price solely based on the given elasticity values.

A Firm Has Capacity Limitations and Charges $30 for Its