Question 1Sal's Streaming Company streams TV shows to subscribers in the US and Canada. Demand isQus 50 (1/3)Pus-QCA 80 (2/3)P CA= -where Q's are in thousands of subscriptions per year and P's are the subscription prices per year.The cost of providing Q units of service is given byTC = 1000 + 30Q,where Q = Qus+ QCA(a) What are the profit-maximizing prices and quantities for the US and Canadian markets?(b) As a consequence of a new VPN service that Facebook has developed, subscribers inCanada are now able to get the US streams and vice versa, so Sal can charge only a singleprice. What is the profit-maximizing single price that he should charge?(c) In which situation is Sal better off? In terms of consumers' surplus which situation dopeople in Canada prefer and which do people in the US prefer? Why?

treaming Company streams TV shows to subscribers in the US and Canada. Demand is Qus= 50- (1/3)Pus QCA 80-(2/3)PCA Q's are in thousands of subscriptions per year and P's are the subscription prices per year. me cost of providing Q units of service is given by TC= 1000 + 30Q, here Q = Qus+ QCA' What are the profit-maximizing prices and quantities for the US and Canadian markets? As a consequence of a new VPN service that Facebook has developed, subscribers in Canada are now able to get the US streams and vice versa, so Sal can charge only a single price. What is the profit-maximizing single price that he should charge? In which situation is Sal better off? In terms of consumers' surplus which situation do people in Canada prefer and which do people in the US prefer? Why?

treaming Company streams TV shows to subscribers in the US and Canada. Demand is Qus= 50- (1/3)Pus QCA 80-(2/3)PCA Q's are in thousands of subscriptions per year and P's are the subscription prices per year. me cost of providing Q units of service is given by TC= 1000 + 30Q, here Q = Qus+ QCA' What are the profit-maximizing prices and quantities for the US and Canadian markets? As a consequence of a new VPN service that Facebook has developed, subscribers in Canada are now able to get the US streams and vice versa, so Sal can charge only a single price. What is the profit-maximizing single price that he should charge? In which situation is Sal better off? In terms of consumers' surplus which situation do people in Canada prefer and which do people in the US prefer? Why?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter5: Supply, Demand, And Price: Applications

Section: Chapter Questions

Problem 8QP

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