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Billy Bob's is catering to Baruch College and there are two types of customers: faculty and students. There are 40 faculty members willing to pay $30 per meal while there are 660 students willing to pay $5 per meal. There are 700 meals available at the catering event. Suppose the total cost of catering the event, including the meals, is $2,000. How much profit will Billy Bob's earn if they can perfectly price discriminate? $1,300 $3,500 $4,500 O $2,500

Billy Bob's is catering to Baruch College and there are two types of customers: faculty and students. There are 40 faculty members willing to pay $30 per meal while there are 660 students willing to pay $5 per meal. There are 700 meals available at the catering event. Suppose the total cost of catering the event, including the meals, is $2,000. How much profit will Billy Bob's earn if they can perfectly price discriminate? $1,300 $3,500 $4,500 O $2,500

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 7CQ
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Billy Bob's is catering to Baruch College and there are two types of customers: faculty and students. There are 40 faculty members willing to pay $30 per meal while there are 660 students willing to pay $5 per meal. There are 700 meals available at the catering event. Suppose the total cost of catering the event, including the meals, is $2,000. How much profit will Billy Bob's earn if they can perfectly price discriminate? $1,300 $3,500 $4,500 $2,500
Transcribed Image Text:Billy Bob's is catering to Baruch College and there are two types of customers: faculty and students. There are 40 faculty members willing to pay $30 per meal while there are 660 students willing to pay $5 per meal. There are 700 meals available at the catering event. Suppose the total cost of catering the event, including the meals, is $2,000. How much profit will Billy Bob's earn if they can perfectly price discriminate? $1,300 $3,500 $4,500 $2,500
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