Table 1The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to providepremium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero.QuantityPrice (per year)$180101,5003,0004,5006,0007,5009,00010,50012,00013,50015,00016,50018,000$165$150$135$120$105$90$75$60$45$30$15IsoRefer to Table 1. Assume there are two profit-maximizing digital cable TV companies operating in this market with the same cost structure. Further assume that they are able to collude on the quantity of subscriptions that will be sold andon the price that will be charged for subscriptions. How much profit will each company earn, given that the two firms split the market equally?O A. $205,000O B. $405,000O C. $550,000O D. $610,000

Given that there are two profit-maximizing digital cable TV companies and they are able to collude…

The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide remium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. Quantity Price (per year) $180 500 =,000 -,500 5,000 1,500 ,000 0,500 2,000 3,500 5,000 6,500 8,000 $165 $150 $135 $120 $105 $90 $75 $60 $45 $30 $15 SO Refer to Table 1. Assume there are two profit-maximizing digital cable TV companies operating in this market with the same cost structure. Further assume that they are able to collude on the quantity of subscriptions that will be sold and in the price that will be charged for subscriptions. How much profit will each company earn, given that the two firms split the market equally? A. $205,000 B. $405,000 OC. $550,000 D. $610,000

The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide remium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. Quantity Price (per year) $180 500 =,000 -,500 5,000 1,500 ,000 0,500 2,000 3,500 5,000 6,500 8,000 $165 $150 $135 $120 $105 $90 $75 $60 $45 $30 $15 SO Refer to Table 1. Assume there are two profit-maximizing digital cable TV companies operating in this market with the same cost structure. Further assume that they are able to collude on the quantity of subscriptions that will be sold and in the price that will be charged for subscriptions. How much profit will each company earn, given that the two firms split the market equally? A. $205,000 B. $405,000 OC. $550,000 D. $610,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 20RQ: Under which circumstances does line tax burden fall entirely on consumers?

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Table 16-3 The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $100,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. Price (per year) $120 $100 S 80 $60 $ 40 $ 20 Quantity 3,000 6.000 9,000 12,000 15,000 18,000 S0 41. Refer to Table 16-3. Assume that there are two profit-maxKimizing digital cable TV companies operating in this market. Further assume that they are not able to collude on the price and quantity of premium digital channel subscriptions to sell. How much profit will each firm earn when this market reaches a Nash equilibrium? Select ona a so b ST40,000 C $170,000 d. $220.000
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