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A yoga instructor knows that she faces two types of potential students. The determined student and the one who is not yet sure if yoga is a hobby he/she want to pursue. The utility functions of the

A yoga instructor knows that she faces two types of potential students. The determined student and the one who is not yet sure if yoga is a hobby he/she want to pursue. The utility functions of the two customers are v(q) = aq - q-and u(q) = 50q - q?, where a > 50. The instructor cannot distinguish between the two types of consumers and wants to apply bundling. Find the values of a, such that the instructor prefers to serve only determined student rather than apply second-degree price discrimination. Assume zero marginal cost.

Apr 16 2021 View more View Less

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