Question 2 [20 points) A Hollywood hn studio is overseeing the nal production of its latest lm. The lm studio is deciding how to best release its new movie. It has two possible options: (a) 'T'all Theatrical\": Conduct a theatrical release only (b) \"Limited Theatrical + Streaming\": Conduct a limited theatrical release concurrently with a release to a major streaming platform. If the studio conducts the \"Full Theatrical\" release; then the ticket sale revenue from the hn is subject to uncertainty. The studio estimates that there is a 10% probability of the movie making $30 million; a 15% probability of the movie making $50 million; a 30% probability of the movie making $70 million; a 30% probability of the movie making $80 million; and a 15% probability of the movie making $100 million. If the studio conducts the \"Limited Theatrical + Streaming" release; then the studio would receive $50 million for the rights to the movie from the streaming platform; regardless of how many subscribers view the movie. However; due to the availability of the movie on the streaming platform, and also due to the limited theatrical release; the revenue from ticket sales will be subject to a different type of uncertainty. Under this course of action; the studio estimates that there is a 30% chance of the ticket sale revenue being $20 million; and a 70% chance of the ticket sale revenue being $10 million. The ticket sale revenue under this action is independent of the ticket sale revenue under the \"Full Theatrical\" release. (a) How should the studio release this movie to maximize its expected revenue? [10 points) (b) Suppose that the studio can conduct screenings with representative audiences in di'erent geo graphic locations. By conducting these screenings; the studio would know what the ticket sales revenue would be if a full theatrical release were to be conducted. (The ticket sales under the limited theatrical release would remain uncertain; however.) These screenings would cost $2 million to conduct. Should the hn studio conduct these screenings? [10 points)