i. The price charged when the firm is able to identify members of the group should be based upon each of the group's maximum willingness to pay for each respective service. Consequently, for room and board, the price for Group 1 should be 2500 and for Group 2 it should be 1800. Similarly, for entertainment, the price for Group 1 should be 500, and that for Group 2 should be 750.
ii. The profit in such a case would be 2500 + 1800 + 500 + 750 - 1000*4 = 1550
iii. The price charged when the firm is unable to identify members of the group should be based upon the lowest of the maximum willingness to pay for each group in each respective service. Consequently, for room and board, the price should be 1800. Similarly, for entertainment, the price should be 500.
iv. The profit in such a case would be 1800 + 1800 + 500 + 500 - 1000*4 = 600
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