Managerial Economics 12th Edition by Christopher Thomas,Charles Maurice

Exercise 7

As manager of Citywide Racquet Club, you must determine the best price to charge for locker rentals. Assume that the (marginal) cost of providing lockers is 0. The monthly demand for lockers is estimated to be
Q = 100 - 2 P
where P is the monthly rental price and Q is the number of lockers rented per month.
a. What price would you charge?
b. How many lockers are rented monthly at this price?
c. Explain why you chose this price.