EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 4DQ
To determine
The impact of fixed cost in the decision-making process.
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* CENGAGE MINDTAP
Critical Analysis Questions (Ch 11)
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6. Critical analysis Q13
Gouge-em Cable Company is the only cable television service company licensed to operate in Backwater County. Most of its costs are access fees and
maintenance expenses. These fixed costs total $100,000 monthly. The marginal cost of adding another subscriber to its system is constant at $4 per
month. Gouge-em's demand curve can be determined from the data in the accompanying table.
Complete the following table by computing the total revenue, total cost, and profit at each of the various subscription prices.
Number of Subscribers
Total Revenue
Fixed Cost
Total Cost
Profit
Subscription Price
(Thousands Per Month)
($, Thousands) (S, Thousands) (S, Thousands) (S, Thousands)
$25
20
$100
20
40
$100
15
IS
$100
60
10
80
$100
100
$100
IS
150
15A
$100
thousand.
Gouge-em will charge
v for its cable services, earning them a profit of $
$1
Now suppose the Back
unty Public…
Suppose that you own a 10-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. If the price at which wheat can be sold is $5 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres? What if the price of wheat rose to $6 per bushel?
(Butterworth) Mrs. Butterworth Maple Syrup budgets its marketing efforts using competitive parity.
Its current market share and share of voice are both 42%. With the release of a new cannabis-
Infused flavor, Mrs. Butterworth wants to get its market share even higher. If Mrs. Butterworth
wants to increase its market share to 48%, how many additional share of voice points do they need?
O 12
O75
O 10.5
Chapter 17 Solutions
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