Suppose that you run a tutoring service for economics students. The table below reports the demand for your services by 8 students per week. In the table are reported each student’s reservation price of a tutoring session per week. Note that each student demands at most one tutorial session per week. In addition, the opportunity cost of your time is $24 per session. There are no competitors for your service. A)How many tutor session is socially optimal? Explain. B)Assume that you can only charge a single price for your services. What price are you going to charge the students to maximize your profit? How many sessions will you sell? C)Now, suppose that you are able to practice perfect price discrimination. How many sessions will you sell to maximise profits? Compute consumer surplus and the Deadweight loss.
Suppose that you run a tutoring service for economics students. The table below reports the demand for your services by 8 students per week. In the table are reported each student’s reservation
In addition, the
A)How many tutor session is socially optimal? Explain.
B)Assume that you can only charge a single price for your services. What price are you going to charge the students to maximize your profit? How many sessions will you sell?
C)Now, suppose that you are able to practice perfect
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