Suppose two consumers Andy and Beth have the following demand functions for visits to the
gym per year.
Andy: P = 100 - Q
Beth: P = 80 - Q
Suppose that the local gym has a marginal and average cost of 10 per visit. Calculate the profits associated with the following combinations of annual fee (T) and per visit fee (P), and determine which scheme generates the highest profit.
i) T = 2450, P = 10
ii) T = 4050, P = 10
iii) T = 1800, P = 20