with a basic at $7.99 per month and a premium at $39.99 per month, with various add-ons like no advertisements, recording capabilities, and simultaneous screens. From Hulus perspective, the difference in the cost of service provision between each plan or option seems to be basically the same (it streams content to your device and automated software handles advertisements, availability of local or sports channels, etc.). How do you explain the wide variety of prices for virtually the same service, given that the cost to Hulu of providing each plan is basically the same?
Shaughnessy Consulting, LLC currently enjoys a patent on software that estimates economic damages for clients involved in personal injury lawsuits. Demand for my software is
= 121.3 2P. Creating the software cost me about $2,350 in development and coding. I can produce a copy of the software for $0.65 per unit (constant cost).
How many copies of the software should I attempt to sell? At what price should I sell it? How much profit would I make?
My patent expires in a year, and I know other economic consultants will produce competing software. What quantity and price will result once competing software emerges? How much consumer surplus will my clients (lawyers) gain once the competitors enter? (For measuring consumer surplus, recall that area of a triangle = ½ * base * height.)
How much deadweight loss is created by my patent and monopoly in this software?
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