(Answered) Suppose that a golf club is designing a two-part tariff

Economics

Suppose that a golf club is designing a two-part tariff pricing mechanism in order toincrease profits. Suppose there are two types of golfers, mad-golfers and normal-golfers.The mad-golfers have demand P = 200 – 2Q and normal-golfers have demand P = 160 – 2Q,where P is price per round of golf and Q is number of rounds consumed per year. Assume there are equal numbers of each golfer and that the marginal (and average) cost of a round of golf is 20. Denote the annual membership fee as T and the price per round of golf as P. Which of the following pricing structures realises the most profit for the club?

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