Economics Homework Help

Suppose that you run a tutoring service for economics students.  The table below reports the demand for your services by 8 students per week.  In the table are reported each student’s reservation price of a tutoring session per week.  Note that each student demands at most one tutorial session per week.  

In addition, the opportunity cost of your time is $29 per session.  There are no competitors for your service.  

Student Reservation Price ($ per session) Number of  Sessions given Total Revenue ($ per week) Marginal Revenue ($ per Week)

A 40 1 40 40 B 38 2 76 36 C 36 3 108 32 D 34 4 136 28 E 32 5 160 24 F 30 6 180 20 G 28 7 196 16 H 26 8 208 12  

A) Assume initially that price discrimination is not an option, so you charge a single price.  What price are you going to charge the students to maximize your profit?  How many sessions will you sell? 

B) Calculate consumer surplus under the single price. 

C) Now, suppose that you are able to practice perfect price discrimination.  How many sessions will you sell to maximise profits?    What is consumer surplus now?

GRAPH ENCLOSED IN ATTACHMENTS