Maskorona is planning to sell masks to the Trump and Biden campaigns. They have hired you to determine the optimal pricing strategy to maximize profit. The number of masks demanded by the Trump campaign (q1) and the Biden campaign (q2) is given by

q1= 100020p1q2= 10005p2

Mask-making equipment costs 30000 and the cost of running the equipment is estimated to be 5 per mask. Throughout this problem, assume that the Trump and Biden campaigns are fierce adversaries and would never collude.

1. Suppose Maskorona can charge a pricep1to the Trump campaign and a pricep2to the Biden campaign. What should the pricesp1andp2be to maximize Maskorona's profit?
2. (b)Suppose Maskorona now charges the campaigns a subscription feeFand a pricepper mask. What are the optimal values ofFandp?
3. (c)Suppose the federal election commission bans all forms of price discrimination and requires Maskarona to charge a single pricep. What is the optimal value ofp?
4. (d)Suppose Maskarona is allowed to charged a fixed feeF1to the Trump campaign and a fixed feeF2to the Biden campaign. The price per maskpis the same for both. What are the profit-maximizing values ofF1, F2,andp?
5. (e)Compare the outcomes in (a), (b), and (c). Assume these are the only three possible outcomes. Warren Buffet has donated a large sum of money that can be used to make all 3 outcomesPareto efficient. This money can be distributed to Maskarona, the Trump campaign, and/or the Biden campaign. What is the smallest amount that can be drawn from Warren Buffet's donation to make all three outcomes Pareto efficient? If all three outcomes are already Pareto efficient, then please answer 0.

6.Suppose that price discrimination is banned and mask-making equipment is free. The Biden campaign threatens to instead purchase masks from Masks for Libs unless Maskorona reduces its price. What is the lowest price that Maskarona would agree to?