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

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 6SQ
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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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