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A new exclusive club has just opened downtown. The main way for the club to gain...

A new exclusive club has just opened downtown. The main way for the club to gain revenue is through selling drinks. The individual demands for drinks are given by P(Q)=25−Q2P(Q)=25−Q2 and the marginal cost producing a drink is $5.

a) (4) Suppose that the club can only charge for drinks, what is the profit maximizing pricing strategy?

b) (6) Suppose that the club can actually charge a cover fee CC additionally to a price PP per drink. What is the profit maximizing pricing strategy with a cover fee?

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