Each consumer has the following demand for annual visits to Planet Fitness: Q = 100 - P, where Q is the number of visits to Planet Fitness per year and P is the price per visit. In western Maryland, Planet Fitness has a monopoly on the gym market in the area. If the marginal cost of serving each customer is $10 per visit, what is the optimal two-part tariff that Planet Fitness could charge each customer? O Annual fee = $4,050; P= $10 for each visit O Annual fee = $5,000; P= $10 for each visit. O Annual fee = $4,050; P= $0 for each visit. Annual fee = $5,000; P= $0 for each visit.
Each consumer has the following demand for annual visits to Planet Fitness: Q = 100 - P, where Q is the number of visits to Planet Fitness per year and P is the price per visit. In western Maryland, Planet Fitness has a monopoly on the gym market in the area. If the marginal cost of serving each customer is $10 per visit, what is the optimal two-part tariff that Planet Fitness could charge each customer? O Annual fee = $4,050; P= $10 for each visit O Annual fee = $5,000; P= $10 for each visit. O Annual fee = $4,050; P= $0 for each visit. Annual fee = $5,000; P= $0 for each visit.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 7CQ
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