$4$

Prof. Vish Krishnan

$($b$)$What will be the profit if we charge at $5?(1$ point$)$

$($c$)$What will be the profit if we charge at $8?(1$ point$)$

$($d$)$What is the optimal strategy in this situation? $(2$ points$)$

Now, suppose that the license fee Zoom agrees to pay EVT.ai is based on the volume of the software

copies sold. Zoom has to pay $$2$ per copy sold. This is the variable cost scenario. Now, what

is the optimal strategy for Zoom to price the EVT add$-$on solution? $($Hint: optimal strategy here

means setting the price to maximize the profits$)$

$($e$)$What will be the profit if we charge at $5?(1$ point$)$

$($f$)$What will be the profit if we charge at $8?(1$ point$)$

$($g$)$What is the optimal strategy in this situation? $(2$ points$)$