A large country club with considerable market power currently prices their green fees at $42 per member. However, they are looking to price discriminate by grouping their customers as senior citizens vs. non-senior citizens, as shown below. Senior citizens Non-senior citizens P $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 10 10 20 20 30 40 40 50 50 P $55 MC $50 $45 $40 $35 $30 D $25 MR $20 $15 $10 60 70 80 90 100 Q 10 20 30 40 40 MR D MC 50 60 70 80 90 100 a Assume that the average cost is $25 per member. What profit will the firm achieve if they are able to successfully price discriminate? (a) $1,240 (b) $1,350 (c) $1,620 (d) $1,800 7425

A large country club with considerable market power currently prices their green fees at $42 per member. However, they are looking to price discriminate by grouping their customers as senior citizens vs. non-senior citizens, as shown below. Senior citizens Non-senior citizens P $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 10 10 20 20 30 40 40 50 50 P $55 MC $50 $45 $40 $35 $30 D $25 MR $20 $15 $10 60 70 80 90 100 Q 10 20 30 40 40 MR D MC 50 60 70 80 90 100 a Assume that the average cost is $25 per member. What profit will the firm achieve if they are able to successfully price discriminate? (a) $1,240 (b) $1,350 (c) $1,620 (d) $1,800 7425

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 2.3CE

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