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1. A suburban tennis club rents its courts for $25 per person per hour. John’s demand...

1. A suburban tennis club rents its courts for $25 per person per hour. John’s demand curve for court time

is P= 50 − 0.25Q, where Q is measured in hours per year.

(1.2)Assuming there were no other tennis clubs in town, what is the maximum annual membership fee he would be willing to pay for the right to buy court time for $25/hour?

(1.3)What is the value of the consumer surplus received by John, if pays the membership fee specified in part (b) above and pays an additional $25 per  hour of court time?

(1.4)If the tennis club lowers its price to $20 per person per hour, then how many hours of court time will John be willing to buy? What is the maximum annual membership fee he would be willing to pay for this price?


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