Club to engage in third-degree price discrimination

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Reference no: EM13800503

A private golf club has two types of members. Serious golfers each have an individual demand curve given by = 35 ? .1??, while casual golfers each have an individual demand curve given by ?? = 10 ? .2??. Here, P is the price per round of golf and Q is the number of rounds sold. There are 10 serious golfers and 100 casual golfers with membership at the club and the club faces a total cost curve given by ? = 100 + .0025??^2.

If the club can manage to engage in third-degree price discrimination, what prices should it charge to the two types of members? How many rounds of golf would be sold to each under these prices?

What factors might make it difficult for the club to engage in third-degree price discrimination? Specifically, describe a situation that would undermine the club’s ability to price-discriminate.

Reference no: EM13800503

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