Assignment Help >> Microeconomics
Each identical consumer has the following demand for golf, q = 100-p, where q is the number of rounds of golf played per year and p is the price per round. The only golf course in an isolated town incurs a marginal cost of $10 per round of golf, which is equal to its average cost. It wishes to charge a membership fee and a fee per round of golf.
(a) What price will it set for the membership fee and for each round of golf? How many rounds of golf will each golfer play?
(b) What is the golf course's profit if there are 100 golfers?
(c) How does the golf course's profit per golfer in the above situation compare to the case in which the golf course is banned from charging a membership fee and can only charge a price per round of golf? Explain.