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Given above is the demand and marginal cost of a golf club. The...

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Given above is the demand and marginal cost of a golf club. The...

Given above is the demand and marginal cost of a golf club. The inverse demand function is P = 125 - 0.5Q SMC = short run marginal cost = $10. MR is the marginal revenue curve.

Assume that the fixed cost = 0 and therefore average variable cost (AVC) = average total cost (ATC).

 

(a) If the manager of the above golf club wishes to charge a single profit maximizing price to members to play golf, what will that single price be? Please show your calculations.

 

(b) What is the profit under the single price? Please show your calculations.

 

(c) If the manager wishes to charge a two-part pricing model what is the fixed fee he will charge per golfer (if there are 100 golfers who pay the fixed fee) and what is the price per round of golf and how many rounds of golf are paid for under this two part pricing model.

 

(d) What is the total profit under the two-part pricing model? Please show your calculations.

 

Answer & Explanation

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Answered by AdmiralCat6468 on coursehero.com

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Step-by-step explanation

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