Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 29, Problem 12E
To determine

To explain:

The meaning of the term "Exploitation" used by Mrs. S.

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The manager of a movie theater is developing his policies for the structure of his movie admission prices.  He knows that there are two segments of his market.  Segment A consists of frequent moviegoers.  Segment B consists of those who go to the movies only occasionally. Name a price-segmentation fence and describe one that could be used to effectively charge one price to Segment A and a different price to Segment B.  Explain how this fence can be effective in accomplishing price segmentation in this situation.
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Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p=140-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good. idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p=120-2q. The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's original…
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