Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable company's marginal cost of providing cable service along with the community's demand for cable TV. Assume the local cable company is a monopoly. When the company maximizes profits, consumer surplus equals $ (enter a numeric response using a real number rounded to one decimal place), and producer surplus equals $ Compared to the perfectly competitive market outcome, the cable company creates dead weight loss equal to $ Price and cost (dollars per cable subscription) 120- 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 0 0 10 MR D 20 30 40 50 60 70 80 Quantity of cable subscriptions MC 90 100 Q

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter9: Market Structure And Long-run Equilibrium
Section: Chapter Questions
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Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable
company's marginal cost of providing cable service along with the community's demand for cable TV.
Assume the local cable company is a monopoly.
When the company maximizes profits, consumer surplus equals $ (enter a numeric response using a real number
rounded to one decimal place), and producer surplus equals $
Compared to the perfectly competitive market outcome, the cable company creates dead weight loss equal to $
Price and cost (dollars per cable subscription)
120-
110-
100-
90-
80-
70-
60-
50-
40-
30-
20-
10-
to
10 20
MR
D
30 40 50 60 70 80
Quantity of cable subscriptions
MC
90 100
ON
Transcribed Image Text:Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable company's marginal cost of providing cable service along with the community's demand for cable TV. Assume the local cable company is a monopoly. When the company maximizes profits, consumer surplus equals $ (enter a numeric response using a real number rounded to one decimal place), and producer surplus equals $ Compared to the perfectly competitive market outcome, the cable company creates dead weight loss equal to $ Price and cost (dollars per cable subscription) 120- 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- to 10 20 MR D 30 40 50 60 70 80 Quantity of cable subscriptions MC 90 100 ON
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