1. Suppose a monopolistic golf club serves two types of members in the same size: Type-

1 members' demand isp1=100q1, and type-2 members' demand isp2=50q2. The

club's marginal cost to serve one member is 10. If the club uses a two-part tariff policy to charge a fixed membership fee plus a greens fee per round, what will be the membershipfee? How much will be the greens fee? What is the club's profit?

2. Suppose a monopolistic movie theater serves two groups of movie-goers, adults and children. The demand of adults for movies isp1=200q1, and the demand of children

isp2=100q2. Assume that the marginal cost of serving an additional patron, regardless whether it is an adult or child, is zero.

1. (a)How much will be the adult ticket and child ticket if the theater is allowed to charge different prices for different age groups?
2. (b)If the theater can only charge a uniform price for all age groups, how much is the ticket?
3. (c)Evaluate the social welfare with and without price discrimination.