Graph WTP vs content and explain cap
Company: Capital One
Role: Data Scientist
Category: Statistics & Math
Difficulty: easy
Interview Round: HR Screen
Customers’ maximum willingness to pay (WTP) increases linearly with the number of available shows: WTP = $0 at 0 shows and WTP = $20 at 40 shows, and is capped at $20 for any higher content amounts. a) Sketch the WTP-versus-content curve and write its piecewise functional form. b) What is the marginal WTP increase per additional show below 40? c) Explain why extrapolating a line upward beyond 40 is incorrect here and what market reality the cap represents.
Quick Answer: This question evaluates understanding of piecewise linear functions, marginal analysis, and the economic interpretation of willingness-to-pay, within the Statistics & Math domain for a Data Scientist role.
