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 $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 a price of $65.00 per session, the number of sessions demanded by this consumer would be________________

. At this price and quantity, consumer surplus 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_______ (options 2,4,5,3,6)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.)