Problem 4 - Uniform pricing - Two-Part Tariff The Cliffs is a climbing gym. At the Cliffs, the larger share of production cost comes from rent, equipment maintenance, and the salaries paid to the administrative staff. Suppose that the Cliffs' monthly total cost is TC=FC+2Q where Q is the monthly number of visits to the gym. 1. What is the Cliffs' marginal cost of admitting an extra person? Suppose that all 200 patrons of the Cliffs' have similar preferences summarized by the individual monthly demand curve PD=10q/2. 2. If the Cliffs chose to charge a uniform entry fee (uniform pricing), how high would the gym set the fee? 3. How many times would a patron visit the gym each month? What would be his/her monthly consumer surplus? 4. Keeping in mind that the Cliffs has 200 patrons, what would be the Cliff's producer surplus? Problem 4 - Uniform pricing - Two-Part Tariff The Cliffs is a climbing gym. At the Cliffs, the larger share of production cost comes from rent, equipment maintenance, and the salaries paid to the administrative staff. Suppose that the Cliffs' monthly total cost is TC=FC+2Q where Q is the monthly number of visits to the gym. 1. What is the Cliffs' marginal cost of admitting an extra person? Suppose that all 200 patrons of the Cliffs' have similar preferences summarized by the individual monthly demand curve PD=10q/2. 2. If the Cliffs chose to charge a uniform entry fee (uniform pricing), how high would the gym set the fee? 3. How many times would a patron visit the gym each month? What would be his/her monthly consumer surplus? 4. Keeping in mind that the Cliffs has 200 patrons, what would be the Cliff's producer surplus