This problem shows the gains from cross-layer design between the network layer and the application layer. For transmission of applications like video, the application layer will try to use a high-rate encoding scheme to improve the quality. Now consider that the application is real-time. Given a capacity assignment made by the network layer, if the rate of transmission is high, there will be congestion on the link that will delay the packets beyond deadline due to which a lot of packets will not reach the decoder in time leading to poorer quality. Thus we see a tradeoff. A very simple model of distortion capturing both these effects can be given as