The marketing department of new online streaming service Example+ has conducted a study of its potential customers. The typical viewer's monthly demand for video content is estimated as () = 200 1,000, where is the number of hours of content consumed per month and is the charge for watching an hour of content, in dollars. Example+ faces zero marginal cost of providing a customer access to an additional hour of video content.

1. Find the company's optimal pricing strategy if it can charge a price per hour, a monthly subscription fee, or some combination of both.

New research from the marketing department shows that there is a second, equally numerous groups of potential customers. Analysts have estimated their monthly demand for video content as () = 100 1,250. They believe this group is made up entirely of students, who can easily be identified by requiring an .edu email address at sign-up and a scan of a current school registration form, and that no students are in the original group (whose demand is () = 200 1,000).

2. Find the company's optimal pricing strategy now. Explain your reasoning.

Before the strategy in (b) can be implemented, the marketing department analysts come back to clarify that this second group of customers (the one whose demand is given by () = 100 1,250) does not, in fact, correspond exclusively to students, but contains both students and non-students, and that students are in fact spread out across both this group and the original group (the one whose demand is given by () = 200 1,000). There is no observable demographic characteristic that appears to be more common in one group than the other.

3.Find the company's optimal pricing strategy now. Explain your reasoning.

4. Would your answer to (c) change if, instead of being equally numerous, the second group outnumbered the first 3-to-1? If so, give the new pricing. If not, explain why not.