Microeconomics question

2. (25 points) Two-Part Tariff As the owner of the only golf club in an isolated wealthy community, you must decide on membership dues and fees for playing golf. There are two types of golf players. Professional players have demand 41 = 20 - P Where qu is court hours per week and p is the fee per hour for each individual player. There are also casual players with demand 42 = 10- p Assume that there are 1000 players of each type. Assume the marginal cost of production is equal to $5. You have fixed costs of $2,000 per week. Serious and casual players look alike, so you must charge them the same price. (a) (15 points) Imagine that you concentrate your pricing strategy only on extracting the consumer surplus of professional players. Design a two-part tariff pricing strategy. (b) (5 points) What would be the tariff and price if you which to attract both professional and casual players. Casual players have a lower consumer surplus than professional players for any given price. (c) (5 points) What strategy would be better in terms of profits: your solution to part (a) or part (b)