Tuan lives in a town with only one movie rental store. Suppose Tuan's demand for movie rentals per month is Q = 16 - 2P. The movie store currently charges $5 per movie but is thinking of adding a flat...

Tuan lives in a town with only one movie rental store. Suppose Tuan's demand for movie rentals per month is Q = 16 - 2P. The movie store currently charges $5 per movie but is thinking of adding a flat monthly cardholder fee and dropping the price to $2 per rental. At this new price, what is the largest cardholder fee that Tuan will pay? If the rental

store has a constant marginal cost of $2, which strategy is more profitable?