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Willingness to pay (per month)
13. This table shows the willingness to pay of the only three potential customers of a firm that
runs both a weight room and an indoor swimming pool. The weight room and pool each have a
constant marginal cost of $20 per month. Which of the following pricing strategies yields the
highest producer surplus?
Willingness to pay (per
month)
Weight machines Indoor pool
Abe $60 $50
Betty 50 125
Chris 25 140
Solution
$60 for the weight room, $140 for the pool, or $175 for both, this strategy gives higher surplus to
the producer.

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Willingness to pay (per month) 13- This table shows the willingness to.docx

  • 1. Willingness to pay (per month) 13. This table shows the willingness to pay of the only three potential customers of a firm that runs both a weight room and an indoor swimming pool. The weight room and pool each have a constant marginal cost of $20 per month. Which of the following pricing strategies yields the highest producer surplus? Willingness to pay (per month) Weight machines Indoor pool Abe $60 $50 Betty 50 125 Chris 25 140 Solution $60 for the weight room, $140 for the pool, or $175 for both, this strategy gives higher surplus to the producer.