Question: Please Help me with this question, I will make sure to thumbs up!! Question 3 (20 points) The Copyright Agency for Lyric Opera (CALO) is




Please Help me with this question, I will make sure to thumbs up!!




Question 3 (20 points) The Copyright Agency for Lyric Opera (CALO) is an agency that has the exclusive right to grant licenses allowing opera companies to hold public performances of lyric opera works. The marginal cost of granting a license is constant and equal to $100 (i.e. the amount of royalties paid to the author of the work). CALO operates in New York and California; the opera companies' demand for licenses in each state is described by the functions Dry(p) = 150-p and PCar(p) = 100-p/2. respectively where NY stands for 'New York' and Cal stands for 'California'. First assume that the opera companies from New York (resp. California) cannot buy licenses from the California (New York) CALO division. (a) (5 points) Calculate the absolute value of the price elasticity of demand in each country as a function of p. For any given p where demand is positive in both markets, which state has the least elastic demand?{h} {5 points) Determine the price at which the licensee are sold in each State. (c) (5 points) Assume now that the market for licenses is integrated, so that the opera companies can buy licenses from whichever CALO division they want. At which price are licenses sold in this case?(d) (5 points) Conceptually who is helped and who is hurt by integration? (No calculation is needed!)
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