Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small). Total Marginal Revenue Total Cost Marginal Cost Price Quantity Revenue 68 3 204 144 64 60 4 256 52 172 28 300 44 204 32 56 52 336 36 240 280 36 7 364 28 40 48 384 20 324 44 Suppose the local government imposes a $97 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.) O A. Comcast should produce 6 units in the short run and shut down in the long run. B. Comcast should shut down in the short run and in the long run. c. Comcast should shut down in the short run and produce 6 units in the long run. OD. Comcast should produce 6 units in the short run and in the long run. O E. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $16 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell subscriptions (enter a numeric response using an integer) and charge a price of $ for profits of $

Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small). Total Marginal Revenue Total Cost Marginal Cost Price Quantity Revenue 68 3 204 144 64 60 4 256 52 172 28 300 44 204 32 56 52 336 36 240 280 36 7 364 28 40 48 384 20 324 44 Suppose the local government imposes a $97 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.) O A. Comcast should produce 6 units in the short run and shut down in the long run. B. Comcast should shut down in the short run and in the long run. c. Comcast should shut down in the short run and produce 6 units in the long run. OD. Comcast should produce 6 units in the short run and in the long run. O E. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $16 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell subscriptions (enter a numeric response using an integer) and charge a price of $ for profits of $

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Monopoly

Section: Chapter Questions

Problem 7PA

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Similar questions

Suppose demand for a monopolys product falls 50 that its profit-maximizing price is below average variable cost. How much output should the film supply? Hint: Draw the graph.
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