Why perfect personalized pricing is typically profitable

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Q. As a manager of Citywide Racquet Club, you must conclude the best price to charge for locker rentals. Assume that the marginal cost of providing lockers is 0. The monthly demand for lockers is estimated to be: Q=100-2P where P is the monthly price also Q is the number of lockers rented every month.
a. Illustrate what price would you charge?
b. Elucidate how many lockers are rented monthly at this price?
Explain why you chose this price?

Q. Explain why perfect personalized pricing is typically more profitable than menu pricing. Why then do companies utilize menu pricing?

 

 

Reference no: EM1322844

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