Question

assume that the golf course faces two golfers with the following two demand curves: P1 = 200 - 4Q1 and P2 = 122 - 6Q2. Again assume FC = 0 and MC = $8. d) [8 marks] The golf course owner decides to use a two-part tariff that permits both golfers to use the course. Find each consumer’s output and price under this scenario. What are profits? e) [8 marks] The course has an option of eliminating the low-volume golfer from the market. Would it be better for the course to focus on the high-volume golfer only? Find the output, price per round, and profit if the low-volume golfer is eliminated.

Answer 1