Solve the following: Part1: Find the Total Revenues and Marginal Revenues Part2:

Question

Solve the following:

Part1:

Find the Total Revenues and Marginal Revenues

Part2:

Blank 1: (2,3,4,5,6,7,8,9)

Blank 2: ($70, $75, $80, $85)

Blank 3: ($70, $75, $80, $85)

Blank 4: (2,3,4,5,6,7,8,9)

Blank 5: (falls, stays the same, rises)

5. Price discrimination with two prices Ginny works as a private tutor on evenings and weekends. She has no fixed costs, and her opportunity cost of giving a tutoring session is $66. She has nine potential students each week whose maximum willingness to pay are shown in the following table: Suppose Ginny has to charge a single price to all of her students. Fill in the blanks in the Total Revenue column in the following table with the most total revenue she could earn at that quantity of sessions. Then, compute the marginal revenue at the quantity of tutoring sessions and fill in the corresponding Marginal Revenue column. Now suppose Ginny is the only one offering tutoring sessions and can, therefore, act as a monopoly. If Ginny has to charge a single price to all of her students, she will maximize her profit by giving ___________ tutoring sessions. Now, suppose Ginny is able to find a hurdle that identifies the group of students who are willing to pay at least $85 for a tutoring session (the list-price submarket) and those who are not (the discount-price submarket). In order to maximize her profit under this pricing scheme, she should charge _________ in the list-price submarket and _________ in the discount-price submarket. In total, Ginny gives tutoring sessions. Therefore, in this case, total surplus ___________________ with price discrimination,

Explanation / Answer

Blank 1 9 Blank 2 85 Blank 3 70 Blank 4 7 Blank 5 rises

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