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Redbox and several movie studios have decided to sign a revenue - sharing contract for DVDs . Each DVD costs the studio $ 5 to

Redbox and several movie studios have decided to sign a revenue-sharing contract for DVDs.Each DVD costs the studio $5 to produce. The DVD will be sold to Redbox for $8. Redbox, inturn, prices a DVD at $20. At this selling price, demand is assumed to be normally distributed,with a mean of 3,500 and a standard deviation of 1,200. Any unsold DVDs are discounted to $3,and all sell at this price. Redbox will share 25% of the revenue with the studio, keeping 75% foritself.
a) How many DVDs should Redbox order?
b) How many DVDs does Redbox expect to sell at a discount?
c) What is the profit that Redbox expects to make?
d) What is the profit that the movie studio expects to make

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