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2. Individual Problems 1.4-2 A local Pilates studio recently began offering a monthly subscription service For its patrons. Suppose a particular patron at this studio
2. Individual Problems 1.4-2 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-iJo-paylI schedule, per session. Session Willingness to Pay lst 598 2nd 584 3rd 5?E| 4th 555 5th 542 5th 528 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 51.4. At a price oF 577.00 per session, the number of sessions demanded by this consumer would be |:|. At this price and quantity, consumer surplus is E and nroducersurvlus 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. wherebyl consumers can pay a Flat fee of 5283.50 and can have up to 5 sessions total. Using this subscription pricing model. this consumer would demand V 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.)
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