1. A television station is considering selling promotional videos. It can have the videos produced by one of two suppliers. Supplier A will charge the station a set-up charge of $1,200 plus $2 for each video; supplier B has no set-up charge and will charge $4 per video.The station estimates its demand for the videos to be given by

Q =1,600 - 200P, where P is the price in dollars and Q is the number of videos.

(The associated price equation is P=8-Q/200)

A. Suppose the station plans to give away the videos. How many videos should it order? From which supplier?

B. Suppose the station seeks to maximize its profit from sales of the videos.What price should it charge? How many videos should it order from which supplier? (Hint: Solve two separate problems, one with supplier A and one with supplier B, and then compare profits. In each case, apply the MR = MC rule.)