Question
A local gym plans to use third-degree price discrimination to set its family and corporate rates. The demand for family memberships is = 984 20
A local gym plans to use third-degree price discrimination to set its family and corporate rates. The demand for family memberships is = 984 20 and the demand for corporate memberships is = 2070 50. The gyms cost is = 12,000 + 10.
1. How many memberships of each will the firm sale under third-degree price discrimination?
2. What price will the firm charge for each type of memberships under third-degree price discrimination?
3. What profits will the firm make in total under third-degree price discrimination?
4. If the law does not allow the gym to price discriminate, what profits will the firm make in total under uniform pricing (hint: add the original demands to find the total demand)?
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