For questions 1 - 3 use the following information. Songs for Kids is the sole provider of singing lessons for kids in a town. From their experience and data, Songs for Kids believes that the firm faces two types of customers: Type A customers who are serious singers, and Type B customers who are just enjoying singing for the fun of it. Songs for Kids offers 15 minute, 30 minute, 45 minute, and 60 minute lessons (kids can't concentrate for longer than that). The following table indicates the willingness to pay and group size of each customer type.

WTP

	15 min	30 min	45 min	60 min	Group Size
Type A	$50	$70	$85	$90	100
Type B	$26	$34	$40	$40	100

The following table indicates the marginal willingness to pay (MWTP) values for incremental 15 minutes of lesson time and the group size of each customer type: MWTP

	1	2	3	4	Group Size
Type A	$50	$20	$15	$5	100
Type B	$26	$8	$6	$0	100

All costs can be ignored (the instructors are aspiring singers and are willing to work for next to nothing, so assume the marginal cost is zero). Thus, Songs for Kids' revenue is also its profit. As always when setting prices, assume that any customer who derives the same consumer surplus from multiple options will behave as the seller desires.

2. Compute the optimal pricing menu. As usual, we proceed in two steps: First compute the optimal individual prices and then construct the pricing menu. To begin, consider the following attempt to identify the optimal prices for incremental 15 minutes of lesson time: The optimal price of unit 1 is $26. It generates $5; 200 in profit. The optimal price of unit 2 is $20. It generates $2; 000 in profit. The optimal price of unit 3 is $15. It generates $1; 500 in profit. The optimal price of unit 4 is $5. It generates $500 in profit.

Of the four statements above, how many correctly identify the profit-maximizing unit price in bold? A. All four optimal prices are identified correctly B. Only three optimal prices are identified correctly C. Only two optimal prices are identified correctly D. Only one optimal price is identified correctly E. None of the optimal prices is identified correctly