Two-part tariff by charging a price for membership

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Reference no: EM131094734

Consider a local golf course that prices using a two-part tariff by charging a price for membership and then charging per round of golf played. Individual demand for rounds of golf is given along with the corresponding marginal revenue curve. The marginal cost of providing rounds of golf is given. First, using the double drop line, identify the per-round price the course will charge members and the number of rounds of golf they will sell to the members. Label this as (Pt, Qt). Use the quadrilateral drawing tool to identify the area corresponding to the revenues earned by selling rounds of golf at this price. Label this as Golf Revenue. Next, use the triangle drawing tool to identify the area coresponding to the tariff the golf course will charge for membership. Label this as Membership Fee.

Reference no: EM131094734

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