ABCD ABCD AaBb Abbcc AaB 1 Normal 1 No Space Heading 1 Heading 2 Tibe Names: MKTG 300 Homework #2 As before, only one set of responses is needed per group. Please do show your work. Partiel credit is available 1. Price increases are always a thorny issue with consumers, and a few years ago Netflix, the video streaming and DVD by mail giont, set off a firestorm by announcing a 60 percent price increase on its most affordable rental plan. Previously, for $9.99 per month, customers were able to rent one DVD at a time plus enjoy unlimited streaming over the Internet. Initially, Netflix proposed price increase of $15.98 per month, a combination of an existing 57.99--month streaming only plan with a new $7.99 a month DVD-only plan that allows customers to receive one disc at a time via mail. So customers either had to ante up to continue with the same level of service or step down to one of the more limited services priced at $7.99 per month. Most customers switched to the streaming only option, which reduced variable costs for Netflix due to postage savings. Netflix had 23 million subscribers of the 59.99 per month DVD/streaming hybrid plan prior to the price increase Calculate the monthly contribution Netflix realizes from a subscriber at the price of $9.99 per month and $15.98 per month, respectively. Assume average variable costs per customer are 53.50 per month, which do not change with the price increase. How many disgruntled customers can Netflix lose before profitability is affected negatively