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A Careful Analysis of Demand for Bubbles in Strasburg, North

Question 31

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{R/4, W}, where R is the number of pulverized Lawrence Welk records and W is gallons of North Dakota well water.PR = $1, PW = $4.) If demand for Bubbles by senior citizens is described by Q0 = 500P-3/2 while demand by those under 65 years old is Qy = 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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