Question

German brothels recently began offering a monthly subscription service for multiple purchasers. If you thought that the brothels' encouragement of prostitution was immoral to begin with, would you consider this pricing plan to be even more immoral? Suppose a particular patron at a German brothel has the following willingness-to-pay schedule for services at the brothel, per session. Session Willingness to Pay 1st $105 2nd $90 3rd $75 4th $60 5th $45 6th $30 Suppose this consumer would not demand any more sessions, even for free. Also assume that the marginal cost to the brothel, per session, is constant at $15. At a price of $82.50 per session, the number of sessions demanded by this consumer would be . At this price and quantity, consumer surplus is

Answer 1

Answer:

The pricing plan of the is even more immoral to buttress that the fact that brothel was encouraged, the fact that subscription packages was introduced will enhance the practice of prostitution which also has a pricing system which is aimed at I creasing the producer surplus.

Explanation:

Given the following :

Session - - - - - Willingness to Pay

1st - - - - - $105

2nd - - - - $90

3rd - - - - -$75

4th - - - - - $60

5th - - - - - $45

6th - - - - - $30

At price of $82.50 per session, the number of sessions demanded by this consumer will be 2.

Consumer surplus = ($105 - $82.50) = $22.50

Producer surplus = ($82.50 - $22.50) = $60