A local club in District A charges a fixed monthly membership fee of $48. Members are allowed to borrow as many videos as they would like to under this membership plan. Suppose an average member borrows 8 videos per month. Now the local club decides to waive the monthly membership fee but charges $6 for borrowing each video. Discuss the effect of the new policy on the total number of videos lent out from the local club each month. Provide brief explanation to your answer.

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Let a b Am R is the Revenue When R48 MR Marginal Revenice DR 0 62 when price of lending co... View the full answer