As the owner of the only tennis club in an isolated wealthy community, you must decide on membership dues and fees for court time. There are two types of tennis players. "Serious" players have a weekly demand Ps = 12 - Qs where Q, is court hours per week and Pis the fee per hour for each individual player. There are also "occasional" players with a weekly demand P = 16 - 400 Assume that there are 1,000 players of each type. Because you have plenty of courts, the marginal cost of court time is $0. You have fixed costs of $15,000 per week. Suppose that to maintain a "professional" atmosphere, you want to limit membership to serious players. How should you set the annual membership dues and court fees (assume 52 weeks per year) to maximize profits, keeping in mind the constraint that only serious players choose to join? What would profits be (per week)? (round your answers to whole dollars) The annual membership fee is S The court fee is S Weekhr profit is SO

As the owner of the only tennis club in an isolated wealthy community, you must decide on membership dues and fees for court time. There are two types of tennis players. "Serious" players have a weekly demand Ps = 12 - Qs where Q, is court hours per week and Pis the fee per hour for each individual player. There are also "occasional" players with a weekly demand P = 16 - 400 Assume that there are 1,000 players of each type. Because you have plenty of courts, the marginal cost of court time is $0. You have fixed costs of $15,000 per week. Suppose that to maintain a "professional" atmosphere, you want to limit membership to serious players. How should you set the annual membership dues and court fees (assume 52 weeks per year) to maximize profits, keeping in mind the constraint that only serious players choose to join? What would profits be (per week)? (round your answers to whole dollars) The annual membership fee is S The court fee is S Weekhr profit is SO

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

As the owner of the only tennis club in an isolated wealthy community, you must decide on membership dues and fees for court time. There are two types of tennis players. "Serious" players have a weekly demand
Ps = 12- Qs
where Q, is court hours per week and Pis the fee per hour for each individual player. There are also "occasional" players with a weekly demand
P = 16 - 4Q0
Assume that there are 1,000 players of each type. Because you have plenty of courts, the marginal cost of court time is
$0. You have fixed costs of $15.000 per week.
Suppose that to maintain a "professional" atmosphere, you want to limit membership to serious players. How should you set the annual membership dues and court fees (assume 52 weeks per year) to maximize profits, keeping in
mind the constraint that only serious players choose to join? What would profits be (per week)? (round your answers to whole dollars)
The annual membership fee is S
The court fee is S
Weekly profit is $

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