A local Pilates studio recently began offering a monthly subscription service for its patrons. Suppose a particular patr

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A Local Pilates Studio Recently Began Offering A Monthly Subscription Service For Its Patrons Suppose A Particular Patr 1 (42.96 KiB) Viewed 112 times

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 1 st $70 2nd $60 3rd $50 4th $40 5th $30 6th $20 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 $10. At this price and quantity, consumer surplus At a price of $65.00 per session, the number of sessions demanded by this consumer would be is $ and producer surplus is $ 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 $216.00 and can have up to 6 sessions total. Using this subscription pricing model, this consumer would demand sessions. Under this scenario, consumer surplus is $ and producer surplus is $ (Hint: For consumer surplus, consider how much total value the consumer places on all sessions, versus the total price paid.)