Joe in Question 5.3 marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan’s inverse demand function is p = 100 – 2q. The manager has a policy of offering each member of a married couple the same two- part prices, so he offers them both a new deal. What two- part pricing deal maximizes the club’s profit? Will this new pricing have a higher or lower access fee and per- unit fee than in Joe’s original deal? How much more would the club make if it charged Susan and Joe separate prices?
Answer to relevant QuestionsAs described in the Mini-Case “Available for a Song,” Shiller and Waldfogel (2011) estimated that if iTunes used two-part pricing charging an annual access fee and a low price per song, it would raise its profit by about ...Paradise Cruises has a monopoly in renting luxury yachts for sailing in the Caribbean Sea. In winter its monthly inverse demand function is p = 200 – q. In summer the inverse demand function is p = 200 – 2q. Paradise has ...According to Robert Guy Matthews, “Fixed Costs Chafe at Steel Mills,” Wall Street Journal, June 10, 2009, stainless steel manufacturers increased prices even though the market demand curve had shifted to the left. In a ...In 2008, cruise ship lines announced they were increasing prices from $ 7 to $ 9 per person per day because of increased fuel costs. According to one analyst, fuel costs for Carnival Corporation’s 84-ship fleet jumped $ ...Solve for the Nash-Bertrand equilibrium for the firms described in Question 3.4 if Firm 1’s marginal cost is $ 30 per unit and Firm 2’s marginal cost is $ 10 per unit.
Post your question