Suppose you are the mayor of a small town with one cable television company. You are...
Suppose you are the mayor of a small town with one cable television company. You are in charge of regulating the price the cable tv company can charge for subscriptions to its services. You know that demand for cable TV and the total costs of the cable company are as follows:
QD = 260 - 16P
TC = 100 + 10Q
1: What is the TV company's marginal cost?
2: Suppose you decide to make the cable provider charge P=ATC. What price do you set?
3: If you make the cable provider charge P=ATC as above, how many subscriptions get sold?
4: If you make the cable provider charge P=ATC as above, what are the firm's profits?
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Suppose you are the mayor of a small town with one cable
television company. You are...
Question 12 (1 point) This graph shows the demand for cable TV services in a town...
Question 12 (1 point) This graph shows the demand for cable TV services in a town of 50,000 households. The local government has given a monopoly franchise to a cable company. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for cable TV services. Notice that the firm's monthly marginal cost is constant at $10 per household. Assume that in the long run, the cable company can avoid...
9. Generic Cable Company has determined that the price elasticity of demand for cable in Generic...
9. Generic Cable Company has determined that the price elasticity of demand for cable in Generic Town is -1.6. a. What does this imply about the nature of demand for cable television? Why might this be the case? b. If the company finds that it must raise monthly cable rates 10% to cover costs, by how much can it expect subscriptions to decline? Choose from below and explain your choice. (assume everything else remains constant) . . . . The...
1. Theo works for a large firm that is a monopolistic provider of cable TV services...
1. Theo works for a large firm that is a monopolistic provider of cable TV services in a big city. At the present time, the firm charges $60 per month for basic cable service. The demand for cable TV in this town has been estimated to be Q 12,000 100P where Q is the number of subscribers (measured in hundreds) and P is the monthly price for basic cable. Thus, 600,000 residents currently purchase cable TV services from Theo's firm....
Question 3 (10 points) Suppose a certain city has a monopol city has a monopoly cable-television...
Question 3 (10 points) Suppose a certain city has a monopol city has a monopoly cable-television company. This company has total costs TC (Hint: using calculus, this means sing calculus, this means MC = 50 since MC is the derivative of TC with respect to output.) The demand in the community is of the form Qo (alternatively, you can write the demand equation as Q. = 30 - 0.1P). • Graphically depict the demand curve as well as the marginal...
Suppose you own the only spa in a small college town. Everybody in town is either...
Suppose you own the only spa in a small college town. Everybody in town is either a student or a professor. Their demand functions for your Relaxing Healing Package (RHP) are: Qp = 175-P Qs = 125-P Where Qp and Qsis quantity demanded by professors and students, respectively. Your average variable costs are $50 per customer regardless of the quantity, and your fixed costs are $1000 per month. A) Suppose first that you only sell your product through coupons online,...
Suppose that 20% of the subscribers of a cable television company watch the shopping channel at...
Suppose that 20% of the subscribers of a cable television company watch the shopping channel at least once a week. The cable company is trying to decide whether to replace this channel with a new local station. A survey of 100 subscribers will be undertaken. The cable company has decided to keep the shopping channel if the sample proportion is greater than 0.25. What is the approximate probability that the cable company will keep the shopping channel, even though the...
please make sure you answer all the questions, thank you 9. Regulating a natural monopoly Consider...
please make sure you answer all the questions, thank you
9. Regulating a natural monopoly Consider the local telephone company, a natural monopoly. The following araph shows the monthly demand curve for phone services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves 100 90 80 70 60 50 40 ATC MO 30 20 10 MRI I 20 16 18 4 6 810 12 14 2 QUANTITY (Thousands of subscriptions) PRICE (Dollars per sub...
Suppose you currently pay $45/ month to the phone company for telephone service; $90/month to the...
Suppose you currently pay $45/ month to the phone company for telephone service; $90/month to the cable company for cable TV; and $50/month to an Internet Service Provider for high-speed Internet access. You learn that you can bundle all these services with the cable company for one monthly fee of $148. What percentage savings is that?
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has...
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $2 per bag no matter how many bags are produced nstructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. a. If this firm kept on increasing its output level, would ATC per bag ever increase? Yes Is this a decreasing-cost...
Check my work Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of conc...
Check my work Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. a. If this firm kept on increasing its output level, would ATC per bag ever increase? Click to...
Question 12 (1 point) This graph shows the demand for cable TV services in a town of 50,000 households. The local government has given a monopoly franchise to a cable company. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for cable TV services. Notice that the firm's monthly marginal cost is constant at $10 per household. Assume that in the long run, the cable company can avoid...
9. Generic Cable Company has determined that the price elasticity of demand for cable in Generic Town is -1.6. a. What does this imply about the nature of demand for cable television? Why might this be the case? b. If the company finds that it must raise monthly cable rates 10% to cover costs, by how much can it expect subscriptions to decline? Choose from below and explain your choice. (assume everything else remains constant) . . . . The...
1. Theo works for a large firm that is a monopolistic provider of cable TV services in a big city. At the present time, the firm charges $60 per month for basic cable service. The demand for cable TV in this town has been estimated to be Q 12,000 100P where Q is the number of subscribers (measured in hundreds) and P is the monthly price for basic cable. Thus, 600,000 residents currently purchase cable TV services from Theo's firm....
Question 3 (10 points) Suppose a certain city has a monopol city has a monopoly cable-television company. This company has total costs TC (Hint: using calculus, this means sing calculus, this means MC = 50 since MC is the derivative of TC with respect to output.) The demand in the community is of the form Qo (alternatively, you can write the demand equation as Q. = 30 - 0.1P). • Graphically depict the demand curve as well as the marginal...
Suppose you own the only spa in a small college town. Everybody in town is either a student or a professor. Their demand functions for your Relaxing Healing Package (RHP) are: Qp = 175-P Qs = 125-P Where Qp and Qsis quantity demanded by professors and students, respectively. Your average variable costs are $50 per customer regardless of the quantity, and your fixed costs are $1000 per month. A) Suppose first that you only sell your product through coupons online,...
please make sure you answer all the questions, thank you
9. Regulating a natural monopoly Consider the local telephone company, a natural monopoly. The following araph shows the monthly demand curve for phone services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves 100 90 80 70 60 50 40 ATC MO 30 20 10 MRI I 20 16 18 4 6 810 12 14 2 QUANTITY (Thousands of subscriptions) PRICE (Dollars per sub...
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $2 per bag no matter how many bags are produced nstructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. a. If this firm kept on increasing its output level, would ATC per bag ever increase? Yes Is this a decreasing-cost...
Check my work Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. a. If this firm kept on increasing its output level, would ATC per bag ever increase? Click to...
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