A local Pilates studio recently began offering a monthly subscription service for its patrons. Suppose a particular patron at this studio has the following willingness-to-pay schedule, per session. Session Willingness to Pay 1st $105 2nd $90 3rd $75 4th $60 5th 6th $45 $30 Suppose this consumer would not demand any more sessions, even for free. Also assume that the marginal cost to the studio, per session, is constant at $15. 5 At a price of $82.50 per session, the number of sessions demanded is $ and producer surplus is $ 3 consumer would be At this price and quantity, consumer surplus 2 Suppose the studio has devised a new pricing scheme for consumer whereby consumers can pay a flat fee of $303.75 and can have up t Using this subscription pricing model, this consumer would demand producer surplus is $ total price paid.) 6emand more than 1 session. This pricing scheme is a subscription service, sions total. 4 sessions. Under this scenario, consumer surplus is $ and (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the

A local Pilates studio recently began offering a monthly subscription service for its patrons. Suppose a particular patron at this studio has the following willingness-to-pay schedule, per session. Session Willingness to Pay 1st $105 2nd $90 3rd $75 4th $60 5th 6th $45 $30 Suppose this consumer would not demand any more sessions, even for free. Also assume that the marginal cost to the studio, per session, is constant at $15. 5 At a price of $82.50 per session, the number of sessions demanded is $ and producer surplus is $ 3 consumer would be At this price and quantity, consumer surplus 2 Suppose the studio has devised a new pricing scheme for consumer whereby consumers can pay a flat fee of $303.75 and can have up t Using this subscription pricing model, this consumer would demand producer surplus is $ total price paid.) 6emand more than 1 session. This pricing scheme is a subscription service, sions total. 4 sessions. Under this scenario, consumer surplus is $ and (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 10PA: A friend of yours is considering two cell phone service providers. Provider A charges 120 per month...

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