Restaurants and retail stores often give 10% senior citizen discounts. Use the concept of elasticity to explain how this can be profit maximizing behavior.
What will be an ideal response?
Senior citizens living on a low income and with more leisure time may have more price elastic demand than people who are still working. By lowering prices to people who have higher elasticity the restaurants and retail stores may actually be increasing their profits.
Economics
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The relationship between the quantity of money balances demanded and the interest rate is
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