Answer Happy

1. Consider a coffee shop that has two types of customers: lawyers and doctors. The demand for espresso by lawyers is given by Q = 18 – 3P, where P is measured in dollars and Q is measured in ounces. The demand for espresso by doctors is given by Q = 10 – 2P. There are equal numbers of lawyers and doctors. The marginal cost of an ounce of espresso is $2. (a) Suppose that the coffee shop can identify which customer is a doctor and which is a lawyer. The shop will offer each type of customer a specific size cup of espresso for some total price. How many ounces of espresso will lawyers be offered, and at what total price? How many ounces of espresso will doctors be offered, and at what total price? (HINT: you should find that lawyers are offered a 12 ounce drink for $48, and doctors are offered a 6 ounce drink for $21. Lawyers and doctors are both tired and rich!) a