)Brandon and his family often rent movies from the new internet movie streaming service, Xanadu. The table below shows Brandon’s demand schedule for eight movie rentals that Brandon’s family is interested in watching. Number of Internet movie rentals Willingness to pay each rental 1st $7 2nd $6 3rd $5 4th $4 5th $3 6th $2 7th $1 8th $0 a) If the price of each movie rental from Xanadu is $3, how many movie rentals will Brandon buy, and how much consumer surplus does Brandon receive? Explain your answer, and show your work. (Enter your response here.) b) If the price of each movie rental from Xanadu is $5, how many movie rentals will Brandon buy, and how much consumer surplus does Brandon receive? Explain your answer, and show your work. (Enter your response here.) c) If the Xanadu online service offers as many movie rentals as the customer wants to download, all for a one-time fee of $25.00, how many movie rentals will Brandon download, and how much consumer surplus will Brandon receive? Explain your answer, and show your work. (Enter your response here.) d) If the Xanadu online service offers as many movie rentals as the customer wants to download, all for a one-time fee of $35.00, how many movie rentals will Brandon download, and how much consumer surplus will Brandon receive? Explain your answer. (Enter your response here.) e) If Xanadu’s market research showed that Brandon’s demand represented what most of Xanadu’s customers wanted, what would be the most that Xanadu could charge as a one-time fee for all the downloads that the customer wanted?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Maria has decided always to spend one third of her income on clothing. a. What is her income...

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3)Brandon and his family often rent movies from the new internet movie streaming service, Xanadu. The table below shows Brandon’s demand schedule for eight movie rentals that Brandon’s family is interested in watching.

Number of Internet movie rentals	Willingness to pay each rental
1^st	$7
2^nd	$6
3^rd	$5
4^th	$4
5^th	$3
6^th	$2
7^th	$1
8^th	$0

a) If the price of each movie rental from Xanadu is $3, how many movie rentals will Brandon buy, and how much consumer surplus does Brandon receive? Explain your answer, and show your work.

(Enter your response here.)

b) If the price of each movie rental from Xanadu is $5, how many movie rentals will Brandon buy, and how much consumer surplus does Brandon receive? Explain your answer, and show your work.

(Enter your response here.)

c) If the Xanadu online service offers as many movie rentals as the customer wants to download, all for a one-time fee of $25.00, how many movie rentals will Brandon download, and how much consumer surplus will Brandon receive? Explain your answer, and show your work.

(Enter your response here.)

d) If the Xanadu online service offers as many movie rentals as the customer wants to download, all for a one-time fee of $35.00, how many movie rentals will Brandon download, and how much consumer surplus will Brandon receive? Explain your answer.

(Enter your response here.)

e) If Xanadu’s market research showed that Brandon’s demand represented what most of Xanadu’s customers wanted, what would be the most that Xanadu could charge as a one-time fee for all the downloads that the customer wanted?

(Enter your response here.)

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