1. LegalEagle, Inc. is a risk neutral insurance company specializing in legal insurance. For a flat annual fee, they provide legal document review, legal advice, and a trial defense services. They sell these services through the internet and have no ability to discriminate across customers. There are 4 types of customers in the market for flat flee legal representation and they each make up 25% of the total customer base. The total cost of legal services for each type is as follows: Low User: Customers that will use only $200 of legal services, e.g. writing a will. Medium User: Customers that use $400 of legal services, e.g. writing a will and traffic ticket disputes. High User: Customers that will use $800 of legal services, e.g. wills, traffic tickets, and document review Power User: Customers that will use $1600 of legal services, e.g. all of the above services and a legal trial. The customers know what their expected demand for legal services will be next year, but LegalEagle does not. a. What is the expected cost of serving all 4 customers? b. If LegalEagle charges a flat fee of $750 which customers will sign up? How does their risk profile affect whether they will sign up? Will this be a profitable pricing strategy for LegalEagle? c. If Legal Eagle charges a flat fee of $466.67 which customers will sign up? Will this be a profitable pricing strategy for Legal Eagle? d. If Legal Eagle charges a flat fee of $1600 which customers will sign up? Will this be a profitable pricing strategy for Legal Eagle? e. If Legal Eagle charges a flat fee of $3000 which customers will sign up? Will this be a profitable pricing strategy for Legal Eagle?