Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p =200-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p=180-2q

The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than inJoe's original deal? How much more would the club make if it charged Susan and Joe separate prices?

The club maximizes profit subject to the policy by charging a per round price of p=$____

and a lump-sum fee of F= $____

The profit-maximizing membership fee (F) in Joe's original deal (without the same prices for each member of a marriedcouple) is $___

The Club's extra profit from charging different two-part tariffs (above what its profit would have been from charging the same two-part tariff to Joe and Susan) is $___