The Price Elasticity of Demand for Senior Citizens Purchasing Coffee

Multiple Choice

The price elasticity of demand for senior citizens purchasing coffee from McDonald's is −5,while non-senior citizens have a price elasticity of demand equal to −1.25.If it costs McDonald's $0.02 to produce a coffee,the optimal price for a cup of coffee for non-senior citizens and the resultant marginal cost under third-degree price discrimination are:

A) $0.004 and $0.02.
B) $0.02 and $0.80.
C) $0.10 and $0.02.
D) $10 and $0.20.