1. I already have subscribed to several movie streaming providers (Netflix, Hulu, Amazon Prime Video, Criterion Channel] and am deciding whether to subscribe to one more: Mubi. | enlisted the advice of a few friends. Friend A argues against a Mubi subscription because "you have already hit diminishing returns." Friend B thinks I should get a Mubi subscription because "it has a unique library of movies distinct from the others.\" How would YOU suggest I go about thinking through this decision? Under what conditions should I subscribe to Mubi and under what conditions should I not? Hint: use the material from Module 1 to answer this question! 2. Evaluate this statement: "ssuming that MC>0 and demand is downward sloping, it is always true that the revenue maximizing output level is greater than the profit maximizing output level." Prove your answer and use a graph to illustrate your proof. 3. Suppose you collect data and use regression analysis to estimate the following demand function: Cl 2 5002P + 4| Where: (1 = quantity P 2 price I 2 income Further, suppose your MC is constant and equal to 40. Finally, P240 I=20 suppose the current values are: a. Derive the firm's current demand curve. b. Calculate and interpret the firm's current price elasticity of demand c. Using your results in part b, is this rm currently maximizing profits? Why or why not? Using a welllabeled graph, should the firm increase or decrease output in order to move towards the profit maximizing point? Explain fully. d. What is the profit maximizing output and price levels? Do your answers make sense given your work in part c? Explain fully. e. Suppose the economy enters a recession and income drops by 50%. What happens to the demand curve (be as precise as you can]? How will this change the profit maximizing output and price levels? Explain fully. 4. Suppose you sell your own brand ofjeans online. Some customers give you a rating on your website, but others choose not to. Those that do rate your jeans can choose a number of stars between 0 and 5 to award, with half stars possible. Suppose you are interested in knowing what determines variations in the ratings given by customers. What empirical technique would you employ and why? What challenges do you foresee in producing a report that contains useful and actionable information? Explain fully