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A local Pilates studio recently.r began offering a monthly:r subscription service for its patrons. Suppose a particular patron at this studio has the following willingnesstopay
A local Pilates studio recently.r began offering a monthly:r subscription service for its patrons. Suppose a particular patron at this studio has the following willingnesstopay schedule, per session. Ssion Willingness to Pay 1st $1o5 2nd $9o 3rd $75 4th $511 5th $45 6th $311 Suppose this consumer would not demand any:r more sessions, even for free. Also assume that the marginal cost to the studio, per session: is consint at $15. At a price of $9150 per session, the number of sessions demanded by this consumer would be \\:I . At this price and quantity, consumer surplus Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 session. This pricing scheme is a subscription servioe, whereby oonsumers can pas:r a at fee of $324.00 and can have up to 6 sessions total. Using this subscription pricing model, this consumer would demand 7 sessions. Under this scenario: consumer surplus is and producer surplus is . (Hint: For consumer surplusf consider how much total value the consumer plaoes on all sessions, versus the total price paid.)
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