In the ABC town there is one hair saloon, "Style" who is a natural monopoly in the town. The below Table 1 shows the demand schedule (the first 2 columns) and "Style" marginal cost schedule. "Style" has conducted a marketing survey and discovered that it has 4 types of customers each hour. Table2 shows each customers' willingness to pay (WTP) for hair care services. "Style" hair saloon has fixed costs equal to $20. Assume that "Style" salon is a profit maximizer.

For each of the below scenarios, find:the number of haircuts sold; price of haircut; and profitof "Style" salon.

Scenario 1: "Style" saloon does not price discriminate (e.g., "Style" saloon charges same price for all customers);

Scenario 2: "Style" saloon perfectly price discriminate;

Describe who benefits from the price discrimination within "Style" saloon?

Table 1: Demand schedule for "Style" hair saloon Price ($ per Quantity Marginal cost haircut) (haircuts per (MC) ($ per hour) hour) 20 0 18 1 16 2 4 14 3 B 12 4 12 10 5 18 Table2: Customers at "Style" saloon Customer WTP ($) one woman 18 one senior 16 one student 14 one boy 12Table 1: Demand schedule for "Style" hair saloon Marginal cost Table2: Customers at "Style" saloon Price ($ per Quantity (haircuts per (MC) ($ per haircut) Customer WTP ($) hour hour) one woman 18 20 0 18 one senior 16 16 one student 14 one boy 12 18