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HW4: 02 + Suppose that all iPod owners consider only two options for downloading music to their MP3 players: purchasing songs from iTunes or copying
HW4: 02 + Suppose that all iPod owners consider only two options for downloading music to their MP3 players: purchasing songs from iTunes or copying songs from friend's CDs. With these two options, suppose the weekly inverse market demand for Rolling Stones' song "Satisfaction" is! p = 1.98 - 0.00198Q. The marginal cost to Apple Inc. of downloading a song is zero.~ a. What is Apple's optimal price of "Satisfaction"? How many downloads of "Satisfaction" does Apple sell each week?- b. Now suppose that Apple sells a version of the iPod equipped with software in which songs played on the iPod must be downloaded from iTunes. For this iPod, the inverse market demand for "Satisfaction" is p = 2.58 - 0.01290. What is Apple's optimal price of downloads of "Satisfaction" for this new player? How many downloads of "Satisfaction" does Apple sell each week
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