Say I start a streaming service (called Dizzmal, which offers only documentaries about economists). My only cost will be paying publishers $2 for every documentary my customers stream. I can charge an annual membership fee. I have also determined that half my demanders have the following demand: Low Demand: q₁ = 50-5p (p = 10 -0.2q) While the other half have this demand: High Demand: 9H = 60-4p (p = 15 -0.25q) Assuming I want to attract both high and low demanders to become members, what price should I charge for the annual membership and what price should I charge to watch each movie. What will profit be for each low and each high demander?
Say I start a streaming service (called Dizzmal, which offers only documentaries about economists). My only cost will be paying publishers $2 for every documentary my customers stream. I can charge an annual membership fee. I have also determined that half my demanders have the following demand: Low Demand: q₁ = 50-5p (p = 10 -0.2q) While the other half have this demand: High Demand: 9H = 60-4p (p = 15 -0.25q) Assuming I want to attract both high and low demanders to become members, what price should I charge for the annual membership and what price should I charge to watch each movie. What will profit be for each low and each high demander?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 7E: In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price...
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