Herb wants to work exactly 12hr/wk to supplement his graduate fellow-ship. He can either work as a clerk in the library at $6/hr or tutor first- year graduate students in economics. Pay differences aside, he is indifferent between these two jobs. Each of three first- year students has a demand curve for tutoring given by P = 10 - Q, where P is the price in dollars per hour, and Q is the number of hours per week. If Herb has the option of setting a two- part tariff for his tutoring services, how many hours per week should he tutor and how many hours should he work in the library? If he does any tutoring, what should his rate structure be?
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