Suppose That a Night Club's Customers All Have the Same

question 148

Multiple Choice

Suppose that a night club's customers all have the same inverse demand curve for drinks, P = 5 - Q, where P is the price per drink and Q is the number of drinks. The marginal cost of a drink is $1. With the optimal two-part tariff pricing strategy, how much do customers pay to get into the nightclub?

• A) $5
• B) $10
• C) $8
• D) $6

Understand deterrence theory and its advocates.

Differentiate types of deterrence in the context of punishment.

Understand the concept and implications of indeterminate sentences in rehabilitation.

Recognize the consistency/inconsistency of different types of punishment with rehabilitation.