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 $60.50 per session, the number of sessions demanded is $ and producer surplus is $ 2 Using this subscription pricing model, this consumer would demand producer surplus is $ total price paid.) 3 5 Suppose the studio has devised a new pricing scheme for consumer whereby consumers can pay a flat fee of $222.75 and can have up t 6 4 consumer would be . At this price and quantity, consumer surplus emand more than 1 session. This pricing scheme is a subscription service, sions total. 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

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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5. Individual Problems 14-2
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
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 $60.50 per session, the number of sessions demanded
is $
and producer surplus is $
2
3
5
Suppose the studio has devised a new pricing scheme for consumer
whereby consumers can pay a flat fee of $222.75 and can have up t
6
4
consumer would be
At this price and quantity, consumer surplus
emand more than 1 session. This pricing scheme is a subscription service,
sions total.
and
Using this subscription pricing model, this consumer would demand sessions. Under this scenario, consumer surplus is $
producer surplus is $
(Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the
total price paid.)
Transcribed Image Text:5. Individual Problems 14-2 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 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 $60.50 per session, the number of sessions demanded is $ and producer surplus is $ 2 3 5 Suppose the studio has devised a new pricing scheme for consumer whereby consumers can pay a flat fee of $222.75 and can have up t 6 4 consumer would be At this price and quantity, consumer surplus emand more than 1 session. This pricing scheme is a subscription service, sions total. and Using this subscription pricing model, this consumer would demand sessions. Under this scenario, consumer surplus is $ producer surplus is $ (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the total price paid.)
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