Question
consider the following situation. Alex runs a gym. It is the only gym in the region, giving Alex's business a monopoly position in the market.
consider the following situation. Alex runs a gym. It is the only gym in the region, giving Alex's business a monopoly position in the market. Each customer's demand curve for working out in the gym per month is given by the following: P = 70 - 5q, where q is the number of visits to the gym. The total cost is: TC= 20q. Alex is considering new pricing for his business: a membership fee that allows people to join the gym and a unit fee charged for each entry to the gym.
If Alex wants to maximize profits, the optimal membership fee is$_________.
If Alex wants to maximize profits, the unit fee is $_________.
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