Disney World charges $140 for one round of golf from morning until 2:00 P.M. and $60 for one round of golf from 2:00 P.M. until closing. Suppose the marginal cost of one round is $20.
a. What does this price differential suggest about the price sensitivities of people who play golf early in the day compared to those who play in the late afternoon?
b. Calculate the price elasticity of demand for the early-morning golfers and for the late-afternoon golfers.

Question

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The Answer of Disney World charges $140 for one round of golf from morning until 2:00 P.M. and $60 for one round of golf from 2:00 P.M. until closing. Suppose the marginal cost of one round is $20.
a. What does this price differential suggest about the price sensitivities of people who play golf early in the day compared to those who play in the late afternoon?
b. Calculate the price elasticity of demand for the early-morning golfers and for the late-afternoon golfers.

Disney World Charges $140 for One Round of Golf from Morning