gion, giving An S bus 1oPoly positiON IA EHE customer's demand curve for working out in the gym per month is given by the following: P = 80 - 5q, where q is the humber of visits to the gym. The total cost is: TC= 25q. Andrew is considering new pricing for his business: a membership ee that allows people to join the gym and a unit fee charged for each entry to the gym. f Andrew wants to maximize profits, the optimal membership fee is $.
gion, giving An S bus 1oPoly positiON IA EHE customer's demand curve for working out in the gym per month is given by the following: P = 80 - 5q, where q is the humber of visits to the gym. The total cost is: TC= 25q. Andrew is considering new pricing for his business: a membership ee that allows people to join the gym and a unit fee charged for each entry to the gym. f Andrew wants to maximize profits, the optimal membership fee is $.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Andrew runs a gym. It is the only gym in the region, giving Andrew's business a monopoly position in the market. Each
customer's demand curve for working out in the gym per month is given by the following: P = 80 - 5q, where q is the
number of visits to the gym. The total cost is: TC= 25q. Andrew is considering new pricing for his business: a membership
fee that allows people to join the gym and a unit fee charged for each entry to the gym.
If Andrew wants to maximize profits, the optimal membership fee is $_](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F717d9fdc-a33e-4fdd-8988-a9a7012fe245%2F1ff3c8a2-9df4-4461-8105-9d2ac4ae5f83%2F0gfpz2_processed.png&w=3840&q=75)
Transcribed Image Text:Andrew runs a gym. It is the only gym in the region, giving Andrew's business a monopoly position in the market. Each
customer's demand curve for working out in the gym per month is given by the following: P = 80 - 5q, where q is the
number of visits to the gym. The total cost is: TC= 25q. Andrew is considering new pricing for his business: a membership
fee that allows people to join the gym and a unit fee charged for each entry to the gym.
If Andrew wants to maximize profits, the optimal membership fee is $_
![Andrew runs a nightclub called “Fun1040". Given the popularity and cache of the club, he has a monopoly position in the
market. Males nightclub goers have an individual demand curve of P =16 - q, whereas female customers each have an
individual demand curve of P = 22 - q. Andrew has a marginal cost per drink of MC = $2 per unit and no fixed cost. By law,
Andrew is unable to charge an entrance fee. He can, however, charge different prices for men and women for their drinks
(by serving men blue glasses and women customers their drinks in green glasses). If Andrew tries to maximise profit, which
statement is true?
O Andrew charges both men and women $12 per drink; this is fırst-degree price discrimination.
O Andrew charges men $9 per drink and women $12 per drink; this is an example of third-degree price discrimination.
O Andrew charges men $12 per drink and women $9 per drink; this is an example of third-degree price discrimination.
O Andrew charges men $10 per drink and women $7 per drink; this is an example of third-degree price discrimination.
O Andrew will use second-price discrimination in order to maximise the profit.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F717d9fdc-a33e-4fdd-8988-a9a7012fe245%2F1ff3c8a2-9df4-4461-8105-9d2ac4ae5f83%2Fdakuyml_processed.png&w=3840&q=75)
Transcribed Image Text:Andrew runs a nightclub called “Fun1040". Given the popularity and cache of the club, he has a monopoly position in the
market. Males nightclub goers have an individual demand curve of P =16 - q, whereas female customers each have an
individual demand curve of P = 22 - q. Andrew has a marginal cost per drink of MC = $2 per unit and no fixed cost. By law,
Andrew is unable to charge an entrance fee. He can, however, charge different prices for men and women for their drinks
(by serving men blue glasses and women customers their drinks in green glasses). If Andrew tries to maximise profit, which
statement is true?
O Andrew charges both men and women $12 per drink; this is fırst-degree price discrimination.
O Andrew charges men $9 per drink and women $12 per drink; this is an example of third-degree price discrimination.
O Andrew charges men $12 per drink and women $9 per drink; this is an example of third-degree price discrimination.
O Andrew charges men $10 per drink and women $7 per drink; this is an example of third-degree price discrimination.
O Andrew will use second-price discrimination in order to maximise the profit.
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