Problem
A cruise line has space for 500 passengers on each voyage. There are two market segments: elderly passengers and younger passengers. The demand curve for the elderly market segment is Q1 = 750 - 4P1. The demand curve for the younger market segment is Q2 = 850 - 2P2. In each equation, Q denotes the number of passengers on a cruise of a given length and P denotes the price per day. The marginal cost of serving a passenger of either type is $40 per person per day. Assuming the cruise line can price discriminate, what is the profit-maximizing number of passengers of each type? What is the profit-maximizing price for each type of passenger?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.