per-ounce prices? How much coffee does each type of customerdrink, and whatare yourtotal profits? e. Finally supposeyoucannotseparatelydentifystudentsvs. professorsandstill offerthe two optionsyou foundin partd. Find ConsumerSurplusfor students and professorsassumingeachpersonselectshis mostpreferredoption 4) (15 points) RCNoffersa varietyof networktelevisionand specialinterestchannelson cable Assumethat the marginalcost of deliveringtheseto an individualcustomers zero RCNbelievesthatit has 100,000eachof two customertypes with the following reservationpricesfor monthlycableservicesby eachcustomer Customer Type Network Television Special Interest Channels Channels Type A 15 11 Type B 10 17 a. SupposeRCN sets a price for each serviceseparately What prices would it chooseand whatare its operatingprofits? b. WouldRCN Cable find it profitableto bundleboth servicetypes togetherin a single"enhancedbasicservice' bundle and howwouldit set the price for that bundle? 5) (20 points) Thetownof Mentor Ohio, is characterizedby a singlestreet CenterStreet whichis exactlyone mile long There are 100 residents of Mentor, and their homes are uniformlydistributedon CenterStreet Thereare two ice creamstoresin Mentor locatedat the endpointsof CenterStreet Store 0 is locatedat x = 0, while Store 1 is locatedat x = 1. The marginalcost of producingice creamat eachstoreis zero The utilitythata givenconsumer getsfrombuyingice creamfromstorej is given by: Uj =5-p; - 2/x; - x,| where p; is the price of ice cream at store / and (x; - x) is the distance between the locationof consumer and the locationof storej. All consumersdemandexactly one ice cream They purchasefrom the store that maximizestheir utility. If a consumeris indifferentbetweenstores he/she will flip a cointo decidewhichstoreto go to