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QUESTION

If club sets price based on the Serious Golfer, What is the profit maximizing per-round price?

Consider a golf club in a small town that charges customers both a per-round price (P) and a clubmembership fee (F). Its management has estimated that there are 10 serious golfers (S) and 40casual golfers (C). The estimated direct demand curves for each type of golfer is as follows:Serious golfer: Q: = 100 - 2PCasual golfer: Q. = 80 - 2PThe fixed costs of providing a round of golf are negligible and the marginal costs are equal to $10.

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