You are the manager of a golf course. For simplicity assume that you only have two potential
Question:
You are the manager of a golf course. For simplicity assume that you only have two potential customers – a high demand customer whose inverse demand for golf services is given by P = 10 – 0.5Q and a low demand customer whose inverse demand for golf services is given by P = 8 – 0.5Q. Suppose the marginal cost to the golf course of each round of golf is zero.
Suppose you can charge each player a different two-part pricing strategy. The profit maximizing 2 part pricing strategy is
A. | Charge a fixed fee of €100 to the high demand player, a fee of €50 to the low demand player and a per unit fee of zero to both | |
B. | Charge a fixed fee of €100 to the high demand player, a fee of €64 to the low demand player and a per unit fee of zero to both | |
C. | Charge a fixed fee of €100 to the high demand player, a fee of €50 to the low demand player and a per unit fee of €4 to both | |
D. | Charge a fixed fee of €100 to the high demand player, a fee of €64 to the low demand player, a per unit fee of €5 to the high demand player and a fee of €4 to the low demand player |
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger