Consider the Magicam story in the text. Again, let there be 1,000 high demand consumers with inverse demand: P= 16 Q, and 1,000 low demand consumers with inverse demand: P = 12 Q. Suppose also that marginal costs of the film is 2.

a. Show that the price of $4 is the profit maximizing price for Magifilm when the film is sold separately from the camera. b. Suppose that the firm produces the integrated camera plus film cartridge in 8 shot and 14 shot varieties.

i What rental rates will be charged for the 8-shot variety?

ii What rental rates will be charged for the 14-shot variety

iii What are profits

Suppose that there are 1000 low demand consumers and Nh high demand consumers. How many high-demand consumers would there have to be for Rowling to wish to manufacture only the 14-shot variety of the integrated Magicam given that the other variety is 8-shot?