Figure 16-6

Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve.
-Refer to Figure 16-6.Sensei's friend, Marcel, suggests that he charge a one-time membership fee to use the martial arts school, in addition to a per-class charge.Suppose Sensei charges the monopoly price for each class and also imposes a one-time membership fee.What is the maximum amount of revenue from the membership fee he can collect from all his customers?
A)an amount equal to the area A + B
B)an amount equal to the area E + F
C)an amount equal to the area H + G
D)an amount equal to the area A + C + H

Question

Figure 16-6
  
Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve.
-Refer to Figure 16-6.Sensei's friend, Marcel, suggests that he charge a one-time membership fee to use the martial arts school, in addition to a per-class charge.Suppose Sensei charges the monopoly price for each class and also imposes a one-time membership fee.What is the maximum amount of revenue from the membership fee he can collect from all his customers?
A)an amount equal to the area A + B 
B)an amount equal to the area E + F 
C)an amount equal to the area H + G 
D)an amount equal to the area A + C + H

Quizplus · Accepted Answer

The maximum amount of revenue from the membership fee is equal to the area A + B. This is because the membership fee is a one-time charge, and the area A + B represents the total amount of revenue that Sensei can collect from all of his customers.

Figure 16-6 Watanabe Sensei Operates the Only Martial Arts School in Hartfield