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

It wishes to charge a membership fee and a fee per round of golf. What price will it set for each fee?


At a price of $10, consumer surplus is $4,050. The firm maximizes profit by setting the annual fee equal to $4,050 and charging a $10 per round fee.

Economics

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