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An online video streaming service (let's call it XYZ) estimates their average customer's weekly demand to be Q = 5 - P, where Q is
An online video streaming service (let's call it XYZ) estimates their average customer's weekly demand to be Q = 5 - P, where Q is the number of movies (or show episodes) watched per week and P is the price they are charged for each movie or episode. Note the equation above can be rewritten as P = 5 - Q, if so desired. The provider's marginal cost of each showing is $1.If the company decides to rely on the above demand estimate and develop an optimal two-part pricing strategy, what would it be? Explain each element carefully, including how you determined each of the parameters.If the population was indeed uniform in its preferences and each customer's demand was represented by the equations above, how much profit per week is XYZ projected to extract from each of its customers, using the two-part pricing strategy you proposed in part B above
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