during spring break, students have an elasticity of demand for a trip to las vegas of -5. how much should an…

Explanation:

Step1: Recall the price - discrimination formula

The formula for price - discrimination based on elasticities of demand is $\frac{P_1}{P_2}=\frac{1 + \frac{1}{\epsilon_2}}{1+\frac{1}{\epsilon_1}}$, where $P_1$ and $P_2$ are the prices for two different groups, and $\epsilon_1$ and $\epsilon_2$ are their respective elasticities of demand. Let $P_1$ be the price for students, $\epsilon_1=- 5$, $P_2 = 660$ be the price for the general public, and $\epsilon_2=-3$.

Step2: Substitute the values into the formula

We have $\frac{P_1}{660}=\frac{1+\frac{1}{-3}}{1+\frac{1}{-5}}$. First, simplify the numerator and denominator: $1+\frac{1}{-3}=\frac{3 - 1}{3}=\frac{2}{3}$, and $1+\frac{1}{-5}=\frac{5 - 1}{5}=\frac{4}{5}$. Then $\frac{P_1}{660}=\frac{\frac{2}{3}}{\frac{4}{5}}$.

Step3: Calculate the right - hand side of the equation

$\frac{\frac{2}{3}}{\frac{4}{5}}=\frac{2}{3}\times\frac{5}{4}=\frac{5}{6}$. So, $P_1 = 660\times\frac{5}{6}$.

Step4: Solve for $P_1$

$660\times\frac{5}{6}= 550$.

Answer:

$550$