Question 1 Cyberdine rents out access to its super computers. It charges a xed rental payment per month and a usage fee of 19 dollars per day during...
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Question 1 Cyberdine rents out access to its super computers. It charges a fixed rental payment per month
and a usage fee of 19 dollars per day during the month. Cyberdine has two types of potential
customers of equal number—10 businesses and 10 academic institutions. Each business customer
has a demand function for days of super computer time of q = 10 — p, where q is measured in days
per month; each academic institution has a demand function for days of super computer time of
q = 8 — p. The marginal cost to Cyberdine for each day of access it provides a customer is a
constant 2 dollars per day. 1. If Cyberdine could distinguish between business and academic customers, what rental pay-
ment and usage fee should it charge each group to maximize profit? 2. Cyberdine is considering an ‘all you can eat’ pricing model. Customers pay a one time
(monthly) fee but a zero usage fee. If Cyberdine cannot distinguish between business and
academic customers, what monthly fee should it set to maximize profit? Assume that cus-
tomers do not consume more computing then what their demand curves imply. 3. Suppose Cyberdine cannot distinguish between business and academic customers. What
rental payment and usage fee should it set to maximize profit? 4. Suppose Cyberdine’s cost structure changes The cost of supplying q days of computing to
each customer is now 0 (q) = 0.5q2. Cyberdine must set the same rental payment and usage
fee for both business and academic customers. What rental payment and usage fee should
it set to maximize profit?

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