Y7

As the owner of the only tennis club in an isolated wealthy community, you must decide on membership dues and fees tor court time. There are two types of tennis players. "Serious" players have demand 01 = 10 - P where 01 is court hours per week and F' is the fee per hourfor each individual player. There are also "occasional" players with demand 02 = 4 0.25P Assume that there are 1.000 players of each type. Because you have plenty ot courts. the marginal cost of court time is $0. You have fixed costs of $15.000 per week. Serious and occasional players look alike. so you must charge them the same prices. a. Suppose that to maintain a "professional" atmosphere. you want to limit membership to serious players. How should you set the annual membership dues and caurtfees (assume 52 weeks per year) to maximize prots. keeping in mind the constraint that only serious players choose to join? What would prots be (per week)? (round your answers to M0 decimalplaces} The annual membership fee is $ 2600 The court fee is $ 0 Weekly prot is S 35000 b. Afriend tells you that you could make greater profits by encouraging both types of players to join. Is your friend right? What annual dues and court fees would maximize weekly prots? What wou d these prots be? (round your answers to two decimal! places) The annual membership fee is 3 The court fee is $D Weekly prot is $1