$[$Revenue$-$Sharing Contract$]$

A second plan under discussion is a revenue$-$sharing contract. The studio will set the wholesale price at $$6\mathrm{.}75$ in return for $20\%$ of the sales revenue. As before, any unsold DVDs are discounted by Blockbuster to $$4,$ and all sell at this price.

g$.$ Under this plan, how many DVDs should Blockbuster order?

h$.$ What is the expected profit for Blockbuster?

i$.$ What is the expected profit for the studio?

j$.$ Which contract should the studio choose: Refund, or Revenue Sharing? Explain