The demand for a strong demander for a round of golf is PS = 6 – QS
where QS is the number of rounds demanded by a strong demander when the
price of a round of golf is PS. The demand for a weak demander for a round of golf is
PW = 4 â€“ QW where QW is the number of rounds demanded by a weak demander when the
price of a round of golf is PW. The cost of providing an additional round of golf to either type of golfer is a constant 2. There is one golfer of each type. The club has decided that the best pricing policy is a two-part tariff. However, itâ€™s your job to tell the club the optimal entry fee and the optimal use fee to maximize the clubâ€™s profit. The club cannot price discriminate on either the
use or the entry fee. The clubâ€™s fixed cost is 1. What are the clubâ€™s optimal use fee and the optimal entry fee?