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I hope, you will solve this problem 3. (25 points) Jessica owns a tanning salon. The daily fixed cost is 1200 rubles, and the marginal

I hope, you will solve this problem

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3. (25 points) Jessica owns a tanning salon. The daily fixed cost is 1200 rubles, and the marginal cost is 100 rubles per session. She knows the daily demand schedule for the tanning services she provides. Specifically, she knows that five people are willing to pay up to 250 rubles per session, another five are willing to pay 200 rubles per session and so on, as shown in the table below. 2 Price Quantity Total Marginal Marginal Total Profit Revenue Revenue Cost Cost 250 5 100 200 10 100 180 15 100 160 20 100 140 25 100 100 30 100 50 35 100 A. (6 points) Fill out the remaining columns of the table (Hint: Do not forget that marginal revenue is defined per unit.) B. (5 points) Find the profit maximizing price and quantity of the tanning sessions. How much profit is Jessica earning per day? C. (5 points) In what market structure does this salon most likely operate and why? D. (4 points) Jessica notices that it is only the tanned people that are willing to pay 200 rubles or more per session, while the demand at lower prices is due to the non-tanned individuals. She decides to price differentiate: charge a higher price to tanned people and a lower price to everyone else. What are the profit maximizing prices? How many tanning sessions does Jessica sell with price differentiation? How much profit does she earn? E. (5 points) Are consumers better or worse off with price discrimination? Compute the consumer surpluses under both scenarios to illustrate your answer. Is the total welfare higher or lower

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