You are the owner of a nail salon your female

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Intermediate Algebra Within Reach
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Chapter 2 / Exercise 7
Intermediate Algebra Within Reach
Larson
Expert Verified
7. You are the owner of a nail salon. Your female customer’s price elasticity of demand for manicures is 2.5; your male customer’s price elasticity of demand for manicures is 1.2. The marginal cost of manicuring a customer’s nails is $12.a. If you segment the market by gender, what price should you charge women? What price should you charge men?b. Explain intuitively why you should charge each group a different price.
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8. Movie theaters often charge substantially less for afternoon showings than for evening showings. Explain how the-aters use time of day to segment their customers into low-elasticity and high-elasticity groups.
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Intermediate Algebra Within Reach
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Chapter 2 / Exercise 7
Intermediate Algebra Within Reach
Larson
Expert Verified
Pricing Strategies for Firms with Market Power Chapter 10 1379. Owners of a Florida restaurant estimate that the elasticity of demand for meals is 1.5 for senior citizens and 1.33 for everyone else.a. The restaurant is considering offering a senior citizen discount. Use Lerner indices to determine how big (in percentage terms) that discount should be. (Hint: Determine the ratio of the senior citizens’ price to the price for everyone else.)b. Suppose that the restaurant owners discover that seniors tend to demand more attention from their waiters and send back more food as unsatisfactory, to the extent that the marginal cost of serving a senior is twice as high as serving an adult. Accounting for these costs, how large should the senior citizen discount be? (Hint:Refer back to the example in the text, but don’t cancel out marginal costs!)c. Were your results in part (b) surprising? Explain them, intuitively.

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