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6. Muses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs

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6. Muses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs Muses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $25. Reservation price (s per photo) 50 Customer 46 42 38 34 30 22 a. Suppose George is permitted to charge two prices. He knows that customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of S30 or less always use them. At what level should George set the list price of a portrait? At what level should he set the discount price? How many photo portraits will he sell at each price? b. In this case, what is George's economic profit and how much consumer surplus is generated each day? 6. Muses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs Muses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $25. Reservation price (s per photo) 50 Customer 46 42 38 34 30 22 a. Suppose George is permitted to charge two prices. He knows that customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of S30 or less always use them. At what level should George set the list price of a portrait? At what level should he set the discount price? How many photo portraits will he sell at each price? b. In this case, what is George's economic profit and how much consumer surplus is generated each day

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