You are the manager of a gas station in a small town in the, Business Economics

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You are the manager of a gas station in a small town in the

You are the manager of a gas station in a small town in the United States, and your goal is to maximize profits. Based on your experience, the elasticity of demand of Texans for a car wash is –2, and that of non-Texans is –1.5. Your marginal cost is $6.

a. Are the conditions necessary for price discrimination to be an effective means of enhancing profits being met? Explain fully.

b. What is the profit-maximizing price to charge a Texan for a car wash?

c. What is the profit-maximizing price to charge a Californian for a car wash?

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Business Economics: You are the manager of a gas station in a small town in the

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