A tennis club with a good reputation for providing high-quality programs is considering changing the way it

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A tennis club with a good reputation for providing high-quality programs is considering changing the way it charges its customers for lessons. Elena, one of those customers, is keen on improving her tennis skills. Her inverse demand curve for tennis lessons is \(p=100-4 q\), where \(q\) is the number of onehour lessons per month. The club has been charging her and all of its other customers the same price per lesson and has a constant marginal and average cost of \(€ 20\). If the club were to instead charge Elena a membership fee and set her per-lesson price equal to its marginal cost, what membership fee would maximize profit for the club, and how much extra profit would the club earn? A

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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