Calculate the two part pricing

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Reference no: EM1368373

A local surf store estimates that their average customer's demand per year is P = 3.5 - 0.5Q, and knows that the marginal cost of each rental is $0.5.

a- How much should the store charge for an annual membership in order to extract all the consumer surplus using an optimal two-part pricing strategy?

b- How much should the store charge for each rental if it uses an optimal two-part pricing strategy?

Reference no: EM1368373

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