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Problem
Inter scope sells the music of Lady Gaga, who promotes a unique public image and fashion style. Given her huge success, it is likely that by the end of the coming year, multiple performers will be imitating or borrowing heavily from her style. Suppose the current period's supply and demand for Lady Gaga MP3s is given in Figure 15P-1.
a. What are the profit-maximizing price and quantity for Lady Gaga MP3s in the short run?
b. In the long run, what happens to the demand curve?
c. In the long run, what happens to the profit maximizing price?
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