Reference no: EM133125908

You have been hired by pickle.nyc, a new platform that specializes in matching NYC-area pickleball players with other similarly skilled players nearby. Due to the relatively niche nature of the market, it turns  out that you have no other competitors in the region. 

pickle.nyc has determined that demand for subscriptions to the platform is given by Q = 100 - 4P. Each  additional subscription costs the site $5 to provide. 

(a) What is pickle.nyc's marginal revenue from selling its Qth unit? 

(b) How many subscriptions should pickle.nyc sell in order to maximize its profits? And  what price should it charge? 

One day, a brilliant intern realizes that the firm's database of subscribers is a potential goldmine: the site  could further monetize its propriety technology by selling subscriber data to a dating platform. It turns  out that the highest bidder was offering $30 per subscriber (a surprisingly low number given how much  value pickleball players bring to the market). 

(c) Now that it can monetize subscriber data, what is pickle.nyc's marginal revenue from  selling its Qth unit? (Hint: account for all the revenues generated by each additional subscription.) 

(d) Now that it can monetize subscriber data, what is pickle.nyc's optimal subscription  price? How many subscriptions does the platform sell now? 

As word starts to get around about how lucrative pickle.nyc's business is, a new copycat platform appears.  This new platform has identical costs to pickle.nyc (it turns out that everything is being run using open source software on the Amazon cloud) and has signed a similar contract with the dating platform. 

(e) Briefly explain whether you think this new platform will be successful. What impact  do you think its entry will have on pickle.nyc's price and number of subscriptions, and why?