Hertz car rental charges a business man who makes a last minute reservation $70 per day to rent a ford focus. on that same day, hertz charges a vacationing family who made their reservation four weeks in advance, $40 per day for the same type of car. is this price discrimination? charging different prices to rent a ford focus to two different types of customers is a. not price discrimination because business travelers deserve to pay more. b. price discrimination because hertz is taking advantage of the different demand curves of business travelers and leisure travelers. c. not price discrimination because vacation travelers deserve a price break. d. price discrimination the vacation traveler can resell the car to the business traveler. e. not price discrimination because it is more fair if everybody pays what they can afford.

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?