3.- (From problem 5.3 in the textbook) A nightclub manager realizes that demand for drinks is more e 1 answer below »

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3.- (From problem 5.3 in the textbook) A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demands: • Under 25: qr = 18 − 5p
• Over 25: q = 10 − 2p
The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $2 each.

(c) If the nightclub cannot charge according to whether the customer is a student or not, but can set a (common) cover charge and a (common) price per drink (which we assume equal to $2), what two-part tariff will it choose?

(d) If the nightclub can set a separate cover charge and price per drink for each group, what two-part pricing schemes will it choose?

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