Question
(c) Suppose that Netflix which is a streaming service that offers a wide variety of award-winning TV show, movies, anime, documentaries, and more, a monopolistic
(c) Suppose that Netflix which is a streaming service that offers a wide variety of award-winning TV show, movies, anime, documentaries, and more, a monopolistic competitive firm in this industry is selecting existing subscribers to enjoy its Price-Knockdown (price as low as RM22 per month) subscription for a year. The following table gives Netflixs demand costs per month for this special deal:
Price (RM) | Quantity (Unit) | TR (RM) | MR (RM) | TC (RM) | MC (RM) |
27 | 3 | 56 | |||
26 | 4 | 73 | |||
25 | 5 | 91 | |||
24 | 6 | 110 | |||
23 | 7 | 130 | |||
22 | 8 | 151 |
(i) Fill in all the blanks in the table. (4 marks)
(ii) If Netflix wants to maximize profits, determine at what price should it charge, and how many subscriptions per month should it select for this special deal? Calculate how much profit will Netflix make? Briefly explain. (2 marks)
(iii) Suppose the local government imposes RM25 per month tax on Netflix company. Now should Netflix revise the charges for the special deal? Determine what price should Netflix charge, how many subscribers should they select and what will be their profits? (2 marks)
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