Question

Engineering Economics

3. Ah Beng, Muthu, Ali, and Ramjit have just made a documentary movie about their childhood life. They are thinking about making the movie available for download on the Internet, and they can act as a single-price monopolist if they choose to. Each time the movie is downloaded, their Internet service provider charges them a fee of $4. The 4brothers are arguing about which price to charge customers per download. The accompanying table shows the demand schedule for their film.

a. Calculate the total revenue and the marginal revenue per download. (2 marks)

b. Ah Beng is proud of the film and wants as many people as possible to download it.Which price should he choose? How many downloads would be sold? (2 marks)

d. Ali wants to maximize profit. Which price should he choose? How many downloads would be sold? (2 marks)

c. Muthu wants as much total revenue as possible. Which price should he choose? How many downloads would be sold? (2 marks)

e. Ramjit wants to charge the efficient price. Which price should he choose? How many downloads would be sold? (2 marks)


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