a boxing coach is setting a two-part tariff consisting of a monthly subscription fee and per-use fee for his studio. He knows that potential customers of his studio may be present biased and sophisticated or present biased and naïve. He decides to set a high monthly subscription fee and charge no fee for each use. Will such a strategy help the coach maximise profit?

a boxing coach is setting a two-part tariff consisting of a monthly subscription fee and per-use fee for his studio. He knows that potential customers of his studio may be present biased and sophisticated or present biased and naïve. He decides to set a high monthly subscription fee and charge no fee for each use. Will such a strategy help the coach maximise profit?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 14.2IP

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