Suppose a particular patron at this studio has the following willingness-to-pay schedule, per session. Session Willingness to Pay 1st 2nd 3rd 4th 5th 6th $77 $66 $55 $44 $33 $22 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 $11. At a price of $71.50 per session, the number of sessions demanded by this consumer would be is S and producer surplus is At this price and quantity, consumer surplus Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 session. This pricing scheme is a subscription service, whereby consumers can pay a flat fee of $237.60 and can have up to 6 sessions total. Using this subscription pricing model, this consumer would demand sessions. Under this scenario, consumer surplus is S producer surplus is S total price paid) and (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the

Suppose a particular patron at this studio has the following willingness-to-pay schedule, per session. Session Willingness to Pay 1st 2nd 3rd 4th 5th 6th $77 $66 $55 $44 $33 $22 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 $11. At a price of $71.50 per session, the number of sessions demanded by this consumer would be is S and producer surplus is At this price and quantity, consumer surplus Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 session. This pricing scheme is a subscription service, whereby consumers can pay a flat fee of $237.60 and can have up to 6 sessions total. Using this subscription pricing model, this consumer would demand sessions. Under this scenario, consumer surplus is S producer surplus is S total price paid) and (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

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Suppose a particular patron at this studio has the following willingness-to-pay schedule, per session.
Session Willingness to Pay
1st
2nd
3rd
4th
5th
6th
$77
$66
$55
$44
$33
$22
ose 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 $11.
At a price of $71.50 per session, the number of sessions demanded by this consumer would be
is 5
and producer surplus is
At this price and quantity, consumer surplus
Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 session. This pricing scheme is a subscription service,
whereby consumers can pay a flat fee of $237.60 and can have up to 6 sessions total.
Using this subscription pricing model, this consumer would demand i
producer surplus is
total price paid)
sessions. Under this scenario, consumer surplus is S
and
(Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the

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