Consider a profit-maximizing monopoly fitness centre in a small town. The firm uses two part pricing. Customers pay a monthly membership fee and also pay $p per hour when they use the club. Assume all customers are identical. Which of the following statements is true?
A. Because the fitness centre has market power it will charge a per hour fee, p, that exceeds marginal cost.
B. The fitness centre should charge different membership fees to different customers.
C. Both A and B.
D. None of the above.