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If the elasticity of demand by students for students for MSOffice is 5, while the elasticity of demand by business professional is 2, and the marginal cost of producing another bundle of the office suite is $50, what are the profit mazimizing prices of the student bundle versus the professional bundle, assuming they are in fact identical versions.

b) If the markets are not segmented, waht kind of arbitrage could take place?

c) How could MS Office prevent this type of arbitrage?Think of at least two ways!

d)Are these techniques to enforce price discrimination legal and should they be?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9472824

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