Question
You are the manager of a golf course. For simplicity assume that you only have two potential customers a high demand customer whose inverse demand
You are the manager of a golf course. For simplicity assume that you only have two potential customers a high demand customer whose inverse demand for golf services is given by P = 10 0.5Q and a low demand customer whose inverse demand for golf services is given by P = 8 0.5Q. Suppose the marginal cost to the golf course of each round of golf is zero. Suppose you have to charge both players the same two-part pricing strategy. Which of the following pricing strategies will yield the highest profit for you?
A. | Charge a fixed fee of 100 and a per unit fee of zero | |
B. | Charge a fixed fee of 64 and a per unit fee of zero | |
C. | Charge a fixed fee of 64 and a per unit fee of 4 | |
D. | Charge a fixed fee of 128 and a fixed fee of zero. |
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