Suppose Northvale Golf Club in Technical Problem 2 also has a second group of 100 identical golfers, weekend players, who wish to play at the club. The demand for rounds of golf by each one of the 100 identical weekend golfers is given by D_WK in Panel B of Figure 14.4. Assume the same cost structure as given in Technical Problem 2. The manager designs an optimal two-part pricing plan for these two groups of golfers.a. The optimal green fee to set for each round of golf is $ _________.b. The optimal annual membership charge is $_________ for senior golfers and $_________ for weekend golfers.c. Under this two-part pricing plan, Northvale?s annual profit is $ _________.

Figure 14.4

Data From Problem 2

At Northvale Golf Club, the demand for rounds of golf by each one of the 100 identical senior golfer members is given by D_SR in Figure 14.3. Northvale?s annual fixed costs are $500,000, and variable costs are constant and equal to $30 per round.a. If the manager of Northvale charges a uniform green fee to all senior golfers, the profit-maximizing green fee is $____________ per round. Under this uniform pricing plan, Northvale?s annual total revenue is $____________ and total variable cost is $ ____________. Northvale?s profit under uniform pricing is $____________ per year.b. If the manager instead decides to employ a two-part pricing plan, the profit-maximizing green fee is $____________ per round, and the annual membership charge is $ ___________. The two-part pricing plan results in total annual profit of $ ____________.c. Which pricing plan?uniform pricing or two-part pricing?generates more profit for Northvale?s owner? Is this the pricing plan you expected to be more profitable? Why or why not?

Figure 14.3

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125 DSR: PSR = 125 – 0.5QSR 67.50 10 SMC = AVC %3D 115. MRSR 250 230 Quantity (rounds of golf per year) Price and cost (dollars per round)