Question

The demand for health club services is Q = 350 − 2P and the marginal cost of providing these services is MC = 110 + 2Q. If a two-part tariff pricing system is used, what is the optimal price and quantity combination?

a.P = 52 and Q = 240
b.P = 199 and Q = 52
c.P = 26 and Q = 162
d.P = 162 and Q = 26
e.none of the above

Mar 21, 2012

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