-Refer to the figures above. Suppose the graphs represent the demand for use of a local golf course for which there is no significant competition (it has a local monopoly). P denotes the price of a round of golf and Q is the quantity of rounds sold each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course should:
A) charge $9 for each round, regardless of the day of the week.
B) charge $7 for each round, regardless of the day of the week.
C) charge $7 for each round on weekdays, and $10 during the weekend.
D) charge $9 for each round on weekdays, and $10 during the weekend.

Question

-Refer to the figures above. Suppose the graphs represent the demand for use of a local golf course for which there is no significant competition (it has a local monopoly). P denotes the price of a round of golf and Q is the quantity of rounds sold each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course should:
A) charge $9 for each round, regardless of the day of the week. 
B) charge $7 for each round, regardless of the day of the week. 
C) charge $7 for each round on weekdays, and $10 during the weekend. 
D) charge $9 for each round on weekdays, and $10 during the weekend.

Quizplus · Accepted Answer

The profit-maximizing price is where marginal revenue equals marginal cost. The graphs suggest different demand curves for weekdays and weekends, indicating different optimal pricing. Charging $7 on weekdays and $10 on weekends aligns with maximizing profit based on demand differences.

-Refer to the Figures Above