Problem 1 (Double Marginalization). Suppose Marvel is a monopolist movie maker for superhero movies (Let's forget about DC). Moreover, suppose Disney is the only inter- mediary that provides streaming services to the online customers. Assume the marginal cost of making a movie is l. The inverse demand for superhero movies faced by Disney is given by P(Q) = W (a) Is the elasticity of demand constant along the demand curve? If so, compute this elasticity. (b) Consider the following situation: Marvel rst sets a perunit price P* for the movies. Then Disney decides how many movies 62* to buy from Marvel, and charges a per-unit price P** to the customers. Compute the optimal P", P**, and 62*. What is the prot earned by Marvel, and the prot earned by Disney? (c) NOW suppose Disney has acquired Marvel, and they act like a single monopolist. Compute the price Pm it sets and the amount of movies Qm it sells. What is the prot of this single monopolist