A private-garage owner has identified two distinct market segments: short-term parkers and all-day parkers with respective demand curves of Ps 3 (Qs/200) and Pc 2-(Q/200). Here P is the average hourly rate and Q is the number of cars parked at this price. The garage owner is considering charging different prices (on a per-hour basis) for short-term parking and all-day parking. The capacity of the garage is 600 cars, and the cost associated with adding extra cars in the garage (up to this limit) is negligible.

a. Given these facts, what is the owner's appropriate objective? How can he ensure that members of each market segment effectively pay a different hourly price?

b. What price should he charge for each type of parker? How many of each type of parker will use the garage at these prices? Will the garage be full?

c. Answer the questions in part b assuming the garage capacity is 400 cars. *14. A golf-course operator must decide what greens fees (prices) to set on rounds of golf. Daily demand during the week is: PD 36 - Q/10 where Q is the number of 18-hole rounds and Pp is the price per round. Daily demand on the weekend is Pw 50-Qw/12. As a practical matter, the capacity of the course is 240 rounds per day. Wear and tear on the golf course is negligible.

a. Can the operator profit by charging different prices during the week and on the weekend? Explain briefly. What greens fees should the operator set on weekdays and how many rounds will be played? On the weekend?

b. When weekend prices skyrocket, some weekend golfers choose to play during the week instead. The greater the difference between weekday and weekend prices, the greater are the number of these "defectors." How might this factor affect the operator's pricing policy? (A qualitative answer will suffice.)