Essay
Internet service in the local market is supplied by Laura's Internet Service. Laura has two types of consumers. The first type of customers is local businesses, and the elasticity of business demand at current prices and quantity is -1.25. The second type is residential customers, and the elasticity of residential demand at current prices and quantity is -4. Laura is charging business users $50 per unit of service while she charges residential customers $17.50 per unit. Can we determine if Laura is maximizing profits?
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