QUESTION 6.3 MBA Magazine is considering two ways of selling its monthly print magazine. One alternative is to offer the magazine at news stands for a given price per issue. The second alternative is to offer the magazine as a package of 12 issues for a single annual subscription price. Through market research, the magazine finds that it has 100,000 potential customers who are likely to value six of the twelve issues at $5 per issue and the remaining six issues at $1 per issue. Since consumers are heterogeneous (not all the same), they don't all value the same six issues at the higher valuation The magazine has $1 million per year in fixed costs and the marginal cost of printing and distributing the magazine is $0.50 per issue. a. Under the pricing per issue scheme, at what price per issue would MBA Magazine maximize its profit? NWhat is this profit? N b. Under the pricing per subscription scheme, at what annual subscription rate would MBA Magazine maximize its profit? N What is this profit? N c. Let's assume that MBA Magazine is currently producing and selling its magazine under the first pricing scheme (per issue price). They are considering bundling the content of the 12 issues per year into 6 issues per year. This would save on printing costs. Would the bundling allow them to increase revenues as well? Explain. d. MBA Magazine is considering developing an Internet edition to supplement its print edition. The Internet edition would involve no additional costs and would be available free of charge to anyone. Is this a good idea? Why or why not