Please help on these questions with explanation.
For questions 4 - 6 use the following information. The internet provider "We Bring You The World" (WBYTW) can deliver high speed Internet services any- where in Iceland with its state of the art fiber-optic network. Market research has determined that WBYTW has two types of potential customers: "heavy users," who are willing to pay up to $120 per month for the service, and "light users," willing to pay up to $40 per month. There are 50,000 heavy users and 130,000 light users. The fiber-optic network is already in place and marginal cost of serving any additional customer is negligible. 4. If WBYTW offers only high speed Internet what price maximizes its profit? A. $40 per month B. $120 per month C. $200 per month D. $240 per monthFor questions 4 - 6 use the following information. The internet provider "We Bring You The World" (WBYTW) can deliver high speed Internet services any- where in Iceland with its state of the art fiber-optic network. Market research has determined that WBYTW has two types of potential customers: "heavy users," who are willing to pay up to $120 per month for the service, and "light users," willing to pay up to $40 per month. There are 50,000 heavy users and 130,000 light users. The fiber-optic network is already in place and marginal cost of serving any additional customer is negligible. 5. WBYTW can also deliver internet services at low speed. The low speed is induced by placing a scrambling device for each final user which costs $1. Thus the unit cost of low speed service is $1. The heavy and light users are willing to pay $70 and $35 for the low speed service, respectively. The following table summarizes the information given so far low speed upgrade to high speed | # of users Heavy Users $70 $50 50 000 Light Users $5 130 0DO Marginal Cost $1 Note: the table represents the marginal values and marginal cost for quality. For example, the Heavy users are willing to pay $70 for the low speed service and $50 for upgrading to the high speed service. Thus they are willing to pay a total of $70 + $50 = $120 for the high speed connection. In order to maximize profit, WBYTW should offer: A. the high speed service at $120 per month and the low speed service at $40 per month B. only the high speed service at $40 per month C. only the low speed service at $70 per month D. the high-speed service at $85 per month and the low speed service at $35 per monthFor questions 4 - 6 use the following information. The internet provider "We Bring You The World" (WBYTW) can deliver high speed Internet services any- where in Iceland with its state of the art fiber-optic network. Market research has determined that WBYTW has two types of potential customers: "heavy users," who are willing to pay up to $120 per month for the service, and "light users," willing to pay up to $40 per month. There are 50,000 heavy users and 130,000 light users. The fiber-optic network is already in place and marginal cost of serving any additional customer is negligible. 6. The global "net neutrality" movement has been lobbying the government to pass legislation which would force WBYTW to offer only the high speed service. WBYTW can hire "Mere and Associates," a prominent law firm which would, through its own lobbying, stop the "high speed only" restriction from being passed into law. Merc would charge $35 000 000 to work on this case. Should WBYTW hire Merc? (Use a horizon of 24 months) A. No - Mere's fee exceeds the extra profit that WBYTW can earn without the restriction B. Yes - the extra profit WBYTW can earn without the restriction exceeds Mere's fee
