The market demand curve for tennis lessons in Venice, CA is given by:

Q=1,000-20P

where Q is the number of overall lessons per week and P is the price for each lesson. There is a large number of (identical) tennis coaches who all face the same, constant marginal costs of $10 per hour.Each tennis lesson is one hour long.Tennis coaches face no fixed costs, and the tennis courts are available for free.

For now, suppose that the tennis coaches compete for lessons, and they do not coordinate with each other.

A. (2 points)What is the price of a lesson and the quantity of lessons booked per week?

B. (3 points)Compute the consumer surplus of people booking tennis lessons (per week).Show graphicallywhich area the consumer surplus reflects (this does not need to be scaled correctly - just a sketch with appropriately labeled lines and axes is sufficient).

Now suppose that all tennis coaches in Venice form an association, and they now coordinate on pricing. The cost per lesson is unchanged.

C. (4 points) What is the profit-maximizing price per lesson that the tennis coach association should charge? What is the corresponding number of lessons that will be booked each week in total?

D. (4 points)Compute the consumer surplus of people booking tennis lessons (per week) under this new pricing. What is the deadweight loss? Show graphically which area the consumer surplus and deadweight loss reflect (as before, this does not need to be scaled correctly - just a sketch with appropriately labeled lines and axes is sufficient).

E. (3 points) The city now introduces a weekly fee of $5,000 that the Venice tennis coach association has to pay for the use of the tennis courts (independent of how many lessons are being offered). How does this fee affect the price per lesson that the association charges? Should the association continue to offer lessons in the long run?