Cable company management wants to know how to maximize total profit, and what price to set. 9) What's the profit maximizing output? 10) What's the profit maximizing price? I 11) Continuing on from the last problem, what are total profits when profits are maximized?
Cable company management wants to know how to maximize total profit, and what price to set. 9) What's the profit maximizing output? 10) What's the profit maximizing price? I 11) Continuing on from the last problem, what are total profits when profits are maximized?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Questions 9-17
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MONOPOLY ANSWER SHEET ANSWER BIN
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FIRM COST DATA
Income
Tax per unit
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$49.61
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$48.35
20,000
$27.26
$13.36
$36.24
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POLICY VARIABLES
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![2) Average cost.
3) Profit per unit of output.
4) Total profit.
Keep output at 20,000 hookups.
5) What is the increase in cost due to one more hookup (MC)?
6) What's the added revenue from one more hookup (MR)?
7) If one more hookup is added, what's the change in profits?
8) At an output of 20,000, should the firm be producing more or less output? [Enter
more or less.]
Cable company management wants to know how to maximize total profit, and what price to set.
9) What's the profit maximizing output?
10) What's the profit maximizing price?
I
11) Continuing on from the last problem, what are total profits when profits are
maximized?
Cable company management expects consumer incomes to rise to $60,000. You must advise
them on what output to sell if the increase occurs.
12) What's the new profit maximizing output?
Continuing on from the last question, record the values of these variables after income rises:
13) Market price.
14) Total profits.
15A) Set all variables to their baseline values. You are visited by staff members from the
cable TV regulator's office. These are government officials and you must tell them
the truth about the firm's operation. Go on to 15B.
The government officials want to know what output will result in the socially best amount of
cable TV services.
15B) What's the socially best output?
16) What's the socially best price?
17) What are total profits when the socially best output and price are set?
24-3
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Transcribed Image Text:2) Average cost.
3) Profit per unit of output.
4) Total profit.
Keep output at 20,000 hookups.
5) What is the increase in cost due to one more hookup (MC)?
6) What's the added revenue from one more hookup (MR)?
7) If one more hookup is added, what's the change in profits?
8) At an output of 20,000, should the firm be producing more or less output? [Enter
more or less.]
Cable company management wants to know how to maximize total profit, and what price to set.
9) What's the profit maximizing output?
10) What's the profit maximizing price?
I
11) Continuing on from the last problem, what are total profits when profits are
maximized?
Cable company management expects consumer incomes to rise to $60,000. You must advise
them on what output to sell if the increase occurs.
12) What's the new profit maximizing output?
Continuing on from the last question, record the values of these variables after income rises:
13) Market price.
14) Total profits.
15A) Set all variables to their baseline values. You are visited by staff members from the
cable TV regulator's office. These are government officials and you must tell them
the truth about the firm's operation. Go on to 15B.
The government officials want to know what output will result in the socially best amount of
cable TV services.
15B) What's the socially best output?
16) What's the socially best price?
17) What are total profits when the socially best output and price are set?
24-3
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