Suppose that a night club's customers all have the same inverse demand curve for drinks, P = 5 - Q, where P is the price per drink and Q is the number of drinks. The marginal cost of a drink is $1. With a two-part tariff pricing strategy, how much do customers pay to get into the nightclub?
A) $5
B) $10
C) $8
D) $6

Question

Quizplus · Accepted Answer

The Answer of Suppose that a night club's customers all have the same inverse demand curve for drinks, P = 5 - Q, where P is the price per drink and Q is the number of drinks. The marginal cost of a drink is $1. With a two-part tariff pricing strategy, how much do customers pay to get into the nightclub?
A) $5
B) $10
C) $8
D) $6

Suppose That a Night Club's Customers All Have the Same