A night-club owner has both graduate student and professor customers. The demand for drinks by a typical graduate student is QS=18-2P. The demand for drinks by a typical professor is QA=12-P. There are equal numbers of each. The marginal cost of each drink is $2. Assume no Sxed costs. If the owner can “card” patrons and determine who is a graduate student or professor and, in turn, can serve each group by offering a cover charge and a number of drink tokens to each group, which allows them to purchase drinks at marginal cost, what will the cover charge be for graduate students? Professors? What is the profit of the club owner under the token and cover charge pricing (same profit assumption as before)?
A night-club owner has both graduate student and professor customers. The demand for drinks by a typical graduate student is QS=18-2P. The demand for drinks by a typical professor is QA=12-P. There are equal numbers of each. The marginal cost of each drink is $2. Assume no Sxed costs.
If the owner can “card” patrons and determine who is a graduate student or professor and, in turn, can serve each group by offering a cover charge and a number of drink tokens to each group, which allows them to purchase drinks at marginal cost, what will the cover charge be for graduate students? Professors?
What is the profit of the club owner under the token and cover charge pricing (same profit assumption as before)?
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