The answer is provided, I have struggled to understand the answer, so please dont just recopying the answer, thank you!

The expensive package designed for serious players should now capture their consumer surplus with an exclusion of the yellow area (from parth we know that if it captures all of their surplus they will not buy it). So the membership due of the expensive package is the area of the two triangles: red and pink: 1/2-3-(3-2)+1/2-{3-3)-(7-2)=21.5 Thus, the expensive package will have 215 in membership dues for \"unlimited\" court usage (or 8 hours) and courtfee of 2 per hour. You are the owner of the only tennis club in an isolated wealthy community. There are two types of tennis players. \"Serious\" players have demand: Q1 = 10 P. There are also \"occasional players\" with demand: Q2 = 4 0.5P. Q is in court hours per week and P is the fee in per hour for each individual player. Marginal cost of court time is 2 per hour. a. If you can distinguish between serious and occasional players, which two packages, consisting of weekly membership dues and court fees, will you offer? b. Now if you can't distinguish between the two types of players, will both packages be on the market? Explain. c. If you can't distinguish between the two types of players, which two packages should you offer so that both are on the market? a. The court fee that you will offer to both groups is just the marginal cost. So P = MC = E2. In this case serious players will use the courts 10-2=8 hours/week. Occasional players will use them 4-0.5.2=3 hours/week. If you can distinguish between the two groups you will offer membership dues that extract their respective consumer surpluses given P = 2: CS1 = = . 8 . (10 -2) = E32 per week. CS2 = 7 . 3 . (8 -2) = 69 per week. So the offered packages are: (1) E32 per week + 2 per hour, up to 8 hours of court time (equivalent to unlimited). (2) 69 per week + E2 per hour, up to 3 hours of court time. P 10 8 MC MC 2 2 Q1 Q2 b. No, because both types of players will buy the cheaper package (the one that costs 9 per week in membership dues and allows to play for up to 3 hours per week). Serious players will switch to the cheaper package since it gives them some consumer surplus (in yellow). P 10 8 J MC 2 3 8 Q1, Q2 c. The cheaper package remains the same, i.e. membership due of 9 per week for up to 3 hours of playing per week and court fee of E2 per hour