Completed quickly and followed instructions given. Grammar, spelling, etc. was all good as well. Thank you so much! Will hire in the future.
Hello can someone help me answer this question? It is for the course pricing. Thank you
Q1. A group of 12 consumers are considering whether to connect to a new social network.Consumer 1 has an intrinsic value of $1 for hooking up to the network, consumer 2 has an intrinsic value of $2, consumer 3 has an intrinsic value of $3, and so on up to consumer 12.Each consumer’s willingness-to—pay (WTP) to connect to the network depends on the totalnumber of persons who are connected to it. The exact relationship is described as follows:for each 1, consumer i’s willingness-to-pay to connect to the network is itimes the totalnumber of persons connected. Thus if 5 people are connected to the network, consumer 1’swillingness-to—pay is $5, consumer 2’s willingness-to—pay is $10 and so on. a. (3 points) Assume that for any given number of people in the social network, consumerwith the highest willingness-to—pay will sign up first. Use a table to show the relationshipamong the total number of people in the network, the marginal consumer who joins thenetwork, and the willingness-to—pay for the marginal consumer. The table should havethree columns: (i) Total no. of consumers in the network, (ii) The intrinsic value of themarginal consumer, (iii) Willingness-to—pay of the marginal consumer. b. (5 points) Suppose the network has decided to subsidize consumers 1 and 2 (i.e., theconsumer with intrinsic value = 1, and consumer with intrinsic value = 2) to join thenetwork for free, and then set the price at $35. Assume that a consumer will not sign upfor the network unless his/her willingness-to—pay will be higher than the price he/shepays, as soon as he/she signs up. What will be the total number of consumers who willsign up the network? [Hint Create a table similar to part (a) and use it to help you answer the question] c. (5 points) Suppose the network has decided to subsidize consumers 11 and 12 (i.e., theconsumer with intrinsic value = 11, and consumer with intrinsic value = 12) to join thenetwork for free, and then set the price at $35. Assume that a consumer will not sign upfor the network unless his/her willingness-to—pay will be higher than the price he/shepays, as soon as he/she signs up. What will be the total number of consumers who willsign up the network? [Hint Create a table similar to part (a) and use it to help you answer the question] (1. (5 points) Suppose the network has decided to subsidize consumers 5 and 6 (i.e., theconsumer with intrinsic value = 5, and consumer with intrinsic value = 6) to join thenetwork for free, and then set the price at $35. Assume that a consumer will not sign upfor the network unless his/her willingness-to—pay will be higher than the price he/shepays, as soon as he/she signs up. What will be the total number of consumers who willsign up the network?
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