Question

A bar offers female patrons a lower price for a drink than male patrons. The bar will maximize profit by selling a total of 200 drinks (a night). At the current prices, male customers buy 150 drinks, while female customers buy 50 drinks. At this allocation between markets, the marginal revenue from the last drink sold to a male customer is $1.50, while the marginal revenue from the last drink sold to a female customer is $0.50.
a. What should the bar do about its pricing?
b. If the bar sells 151 drinks to males and 49 to females, what will be the increase (decrease) in total revenue?



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  • CreatedNovember 18, 2014
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