A golf club’s owner has commissioned a market study that estimates the average customer’s monthly demand curve for playing 18-hole golf game to be Q=50 – 0.5P, where Q stands for the number of 18-hole golf game, and P is the green fee. The marginal cost is given by MC=20. Under two-part pricing strategy, what is the optimal amount of green fee to charge for one round of 18-hole golf game?Under two-part pricing strategy, what is the optimal amount of membership due?Under two-part pricing strategy, what is the size of the profit obtained from the average customer?

Answered: A golf club’s owner has commissioned a…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 5MC

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A golf club’s owner has commissioned a market study that estimates the average customer’s monthly demand curve for playing 18-hole golf game to be

Q=50 – 0.5P,

where Q stands for the number of 18-hole golf game, and P is the green fee. The marginal cost is given by MC=20.

Under two-part pricing strategy, what is the optimal amount of green fee to charge for one round of 18-hole golf game?
Under two-part pricing strategy, what is the optimal amount of membership due?
Under two-part pricing strategy, what is the size of the profit obtained from the average customer?

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