What is apples optimal price of downloads of satisfaction

Reference no: EM13218706

Suppose all iPod owners consider only two options for downloading music to their MP3 players: purchase songs from iTunes or copy songs from friends' CDs. With these two options, suppose the weekly inverse market demand for the Rolling Stones' song "Satisfaction" is p = 1.98- 0.00198Q. The marginal cost to Apple Inc. of downloading a song is zero. a. What is Apple's optimal price of "Satisfaction"? How many downloads of "Satisfaction" does Apple sell each week? b. Now suppose that Apple sells a version of the iPod equipped with software in which songs played on the iPod must be downloaded from iTunes. For this iPod, the inverse market demand for "Satisfaction" is p = 2.58- 0.0075Q. What is Apple's optimal price of downloads of "Satisfaction" for this new player? How many downloads of "Satisfaction" does Apple sell each week?

Reference no: EM13218706

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