**Title: Understanding Comcast's Cable Monopoly****Introduction:**Comcast operates as a cable monopoly. The graph below illustrates Comcast's demand curve, marginal revenue (MR) curve, and marginal cost (MC) curve. Use this graph to explore questions related to company strategy and pricing.**Graph Explanation:**1. **Axes:** - The vertical axis represents Price (P) and Costs in dollars per subscription. - The horizontal axis shows Quantity (Q) as the number of subscriptions in millions per month.2. **Curves:** - **Demand Curve (D):** Downward sloping, representing the relationship between price and the quantity demanded. - **Marginal Revenue Curve (MR):** Lies below the demand curve, indicating how additional subscribers affect revenue. - **Marginal Cost Curve (MC):** U-shaped, reflecting costs associated with incremental subscription production. - **Average Total Cost Curve (ATC):** U-shaped, depicting average costs per subscription.3. **Intersection Points:** - The demand (D) and marginal cost (MC) curves intersect at approximately Q = 7 million, with a price near $20. - The marginal revenue (MR) and marginal cost (MC) curves intersect around Q = 6.5 million.**Usage:**This graph helps analyze monopoly pricing, determine optimal output, and assess economic efficiency within Comcast's market structure. Utilize it to address questions regarding Comcast’s pricing strategies and cost management. **Question**Suppose the government imposes a tax of $20 million per month on cable producers. If Comcast wants to maximize its profit, how many subscriptions should it sell per month?**Options**- 6 million- 6.5 million- 7 million- 5 million

Answered: Image /qna-images/answer/f5b324f4-6b9e-44b8-b5cc-6fd51969f93d.jpg

7) Suppose the government imposes a tax of $20 million per month on cable producers. If Comcast wants to maximize its profit, how many subscriptions should it sell per month? 6 million 6.5 million 7 million 5 million

7) Suppose the government imposes a tax of $20 million per month on cable producers. If Comcast wants to maximize its profit, how many subscriptions should it sell per month? 6 million 6.5 million 7 million 5 million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: The Table below provides details of the demand for Avanti West Coast return train tickets from…

A: The price elasticity of demand refers to the responsiveness of the quantity demanded to a change in…

Q: Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price of…

A: Elasticity of demand in economics measures the responsiveness of the quantity demanded to changes in…

Q: You are chairperson of a state tax commission responsible for establishing a program to raise new…

A: The price elasticity of demand is the rate change in the amount demanded of services and goods…

Q: .The supply of meat is more elastic in the long run than in the short run. Ceteris paribus, as time…

A: Tax burden refers to the economic impact or cost of a tax on the different agents involved in an…

Q: A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are…

A: Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…

Q: Suppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of…

A: "Price elasticity of demand measures the responsiveness of quantity demanded of a commodity with…

Q: Correctly illustrate the market (supply and demand curve). Make sure to correctly shade the area of…

A: Demand and supply forces interact in the market influence the equilibrium in the market. The point…

Q: During spring break, students have an elasticity of demand for a trip to Florida of -4. How much…

Q: 3) Currently 4,000 movie tickets are sold at a price of $ 5 each. The elasticity - price of the…

A: We are going to find the demand function and Price change to answer this question.

Q: Can you please determine whether this statement is True or False, and explain why. Thank you…

A: Answer: False, Explanation: Income elasticity is the ratio of percentage change in quantity demanded…

Q: Please explain how to calculate total revenue

A: Total revenue is the amount that a firm or individual receives after selling the output.

Q: Suppose that the elasticity of demand for BMW cars equals -2 in Germany and equals -3 in the U.K..…

A: Elasticity of demand: - Elasticity of demand measures the responsiveness of change in demand due to…

Q: Question 12 For which of these goods would the market demand be more elastic, fantasy novels or…

A: Elasticity is the responsiveness of quantity of a good due to change in the price.

Q: Suppose the own-price elasticity of demand for good X is |ED |= .8 and the own-price elasticity of…

A: In most marketplaces, most buyers are price sensitive, and the idea is that if a product or service…

Q: Suppose an economist estimates that the price elasticity of supply for red wine is 2.4 while its…

A: When the tax is imposed on a good or service the burden of the tax is imposed on both buyer and the…

Q: Suppose that the long-run price elasticity of demand for gasoline is 0.55. Assume that the price of…

A: Microeconomics' concept of elasticity predicts the change in one variable as a result of a unit…

Q: If you estimate a price elasticity of demand equal to 1.25 (negative sign is implied), do consumers…

A: The incidence of a tax refers to how the burden of the tax is distributed between consumers and…

Q: Suppose the price for tennis shirts increases by 10%, demand decreases by 20%. For tennis shirts,…

A: The Ed( elasticity of demand) demonstrates the degree of responsiveness in quantity demanded of the…

Q: a) What is the Equilibrium Price and Equilibrium Quantity b) If the government imposes a $15 per…

A: We are going to find the tax incidence, equilibrium price and quantity to answer this question.

Q: True or False: Suppose you are advising the Egg Farmers of Canada on changes in the egg market.…

A: Given information: The current price of eggs is $3 per dozen, and the quantity demanded is 2.5…

Question

**Title: Understanding Comcast's Cable Monopoly**

**Introduction:**
Comcast operates as a cable monopoly. The graph below illustrates Comcast's demand curve, marginal revenue (MR) curve, and marginal cost (MC) curve. Use this graph to explore questions related to company strategy and pricing.

**Graph Explanation:**

1. **Axes:**
- The vertical axis represents Price (P) and Costs in dollars per subscription.
- The horizontal axis shows Quantity (Q) as the number of subscriptions in millions per month.

2. **Curves:**
- **Demand Curve (D):** Downward sloping, representing the relationship between price and the quantity demanded.
- **Marginal Revenue Curve (MR):** Lies below the demand curve, indicating how additional subscribers affect revenue.
- **Marginal Cost Curve (MC):** U-shaped, reflecting costs associated with incremental subscription production.
- **Average Total Cost Curve (ATC):** U-shaped, depicting average costs per subscription.

3. **Intersection Points:**
- The demand (D) and marginal cost (MC) curves intersect at approximately Q = 7 million, with a price near $20.
- The marginal revenue (MR) and marginal cost (MC) curves intersect around Q = 6.5 million.

**Usage:**
This graph helps analyze monopoly pricing, determine optimal output, and assess economic efficiency within Comcast's market structure. Utilize it to address questions regarding Comcast’s pricing strategies and cost management.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Profit Maximising Condition

VIEW

Understanding Fixed and Variable Cost

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The elasticity of demand for home computers is -2.5, the elasticity of demand for business computers is -.90, and the elasticity of supply for computers for both purposes is 1. a. A per-unit tax of $200 is imposed on the suppliers of computers. How much does the gross price increase in each market? [Hint: first find the tax incidence/shares.] b. Suppose the untaxed market equilibrium price and quantity in the home computer market are $850 and 10 million, respectively. In the business market, the untaxed market equilibrium price and quantity are $1200 and 15 million, respectively. What is the deadweight loss of the $200 tax? Answer part B please! Hand written asap
12. The Vanier Cup, the finals of Canadian University football, was held on November 26, 2016 at Tim Hortons Field in Hamilton, Ontario. The organizers learned a lot are already planning next year's event! Based on what they learned this year, they know that the demand function for tickets to the game will be given by q = 200, 000 - 10, 000p, where p is the price charged per ticket. The chief organizer for next year is an ambitious person who wants to set prices so as to maximize revenue. (b) Write down an expression for the inverse demand function (price as a function of quantity), total revenue (as a function of quantity), and marginal revenue (as a function of quantity). Find the quantity and price that generate maximum revenue. (c) Derive an expression for the elasticity of ticket demand with respect to price. (Hint: your elasticity should be a function of the price, p.) What is the value of the elasticity at the revenue-maximizing price (your answer for price from part b)?
6) The elasticity of supply for a given good is 0.8; if the percentage increase in the price of said well it is 25%, the quantity supplied of the same: (explain) a) Will increase by 25% b) It will decrease by 17% c) Will increase by 20% d) It will decrease by 25%
A local government is seeking to impose a specific tax on hotel rooms. The price elasticity of supply of hotel rooms is 3.5, and the price elasticity of demand is 0.3. If the new tax is imposed, who will bear the greater burden-hotel suppliers or hotel consumers? The hotel consumers pay percent and hotel suppliers pay percent of the tax. (Enter your responses rounded one decimal place.)
вср 5) Suppose you're an economist for a private university, and the Board of Trustees tasks you with determining how much a tuition increase would impact university enrollment for different types of students. The proposed tuition increase is 10%. The absolute value of the price elasticity of demand for legacy students, that is, students whose parents graduated from the university, is 0.15 and for nonlegacy students is 0.33. The demand curve for legacy students is elastic than the demand curve for nonlegacy students. The rise in tuition would lower student enrollment by %. for non legacy studens Less: 1.5 Less; 3.3 More; 1.5 More; 3.3 0110
A B|C|DE| F GH $40 $35 $30 $25 $20 $15 $10 $5 $0 0 5 10 15 20 25 30 35 40 40 175 300 375 400 375 300 175 0 (b) Calculate the price elasticity of demand between each set of points on the demand curve (i.e., between A and B, B and C, C and D, D and E, etc.) Point on Demand Curve: Price (P): Quantity Demanded (Qo): TR=PXQ I
Suppose that the long-run price elasticity of demand for gasoline is - 0.40. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by S0.70 per gallon after the $1.00 excise tax is imposed. a. Using the midpoint formula, after the tax is imposed, the new quantity of gasoline demanded is billion gallons per year. (Enter your response rounded to two decimal places.)
The table below shows the demand schedule for bagels. Price Quantity Demanded ($/pack) (# of Packs) $12 0 8 12,000 6 18,000 4 24,000 2 30,000 0 36,000 What is the price elasticity of demand when the price increases from $0 to $2? _________ Is demand elastic or inelastic? ___________ What is the price elasticity of…
PRICE (Dollars per unit) 350- 225 175 50 0 12 Region Between Y and Z Between W and X Between X and Y True Z False X For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. 42 54 QUANTITY (Units) 1 84 W Demand True or False: The slope of the demand curve is equal to the value of the price elasticity of demand. Elastic Inelastic Unit Elastic
None
A rise in the price of cabbage from $14 to $18 per bushel, caused by a shift of the demand curve, increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply using point formula is ________________
1. As a transit planner for the city of Miami, you must predict how many people ride the Miami Metrorail and how much money is generated from train fares. According to a recent study, the short-run elasticity of demand for Metrorail is 0.62 and the long- run elasticity is 1.59. The current ridership is 50,000 people per day. Suppose the city commission decides to increase fares by 10%. Predict the changes in train ridership over a one-month period and a five-year period. ANS: b. Over the one-month period, will total revenue increase or decrease? What will happen in the five-year period? ANS