1.Hank's Honkytonk is a local bar and nightspot. On weekends, it requires a $5 cover charge to defray the costs of the live musical acts Hank brings in. This has worked wonderfully, as it generates capacity crowds and a long line of people waiting to enter.

Explain the economic significance of charging a $5 cover for the live musical acts (what kind of price discrimination is this?). Provide two examples of pricing with slight product differentiation schemes that Hank could implement to increase profitability.