(Solution) - There is another way to solve Learning By Doing Exercise 12 5 Recall -(2025 Original AI-Free Solution)

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There is another way to solve Learning-By-Doing Exercise 12.5. Recall that marginal revenue can be written as MR = P + (?P/?Q)Q. By factoring out P, we can write Since third-degree price discrimination means that marginal cost equals marginal revenue in each market segment, the profit-maximizing regular and vacation fares will be determined by MRR = MRV = MC. (Remember the marginal cost of both classes of service is assumed to be the same in the exercise.) Thus use this relationship to verify the answer given in the exercise.