Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small). Total Marginal Revenue Total Cost Marginal Cost Price Quantity Revenue 68 3 204 144 64 60 4 256 52 172 28 300 44 204 32 56 52 336 36 240 280 36 7 364 28 40 48 384 20 324 44 Suppose the local government imposes a $97 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.) O A. Comcast should produce 6 units in the short run and shut down in the long run. B. Comcast should shut down in the short run and in the long run. c. Comcast should shut down in the short run and produce 6 units in the long run. OD. Comcast should produce 6 units in the short run and in the long run. O E. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $16 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell subscriptions (enter a numeric response using an integer) and charge a price of $ for profits of $

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for
simplicity, we keep the number of subscribers artificially small).
Total
Revenue
Marginal
Revenue
Marginal
Total
Price
Quantity
Cost
Cost
68
3
204
144
64
4
256
52
172
28
60
5
300
44
204
32
56
336
36
240
36
52
7
364
28
280
40
48
8
384
20
324
44
Suppose the local government imposes a $97 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.)
O A. Comcast should produce 6 units in the short run and shut down in the long run.
B. Comcast should shut down in the short run and in the long run.
c. Comcast should shut down in the short run and produce 6 units in the long run.
D. Comcast should produce 6 units in the short run and in the long run.
O E. None of the above.
Suppose that the flat per-month tax is replaced with a tax on the firm of $16 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the
table).
To maximize profit, Comcast will sell subscriptions (enter a numeric response using an integer) and charge a price of $ for profits of $.
Transcribed Image Text:Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small). Total Revenue Marginal Revenue Marginal Total Price Quantity Cost Cost 68 3 204 144 64 4 256 52 172 28 60 5 300 44 204 32 56 336 36 240 36 52 7 364 28 280 40 48 8 384 20 324 44 Suppose the local government imposes a $97 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.) O A. Comcast should produce 6 units in the short run and shut down in the long run. B. Comcast should shut down in the short run and in the long run. c. Comcast should shut down in the short run and produce 6 units in the long run. D. Comcast should produce 6 units in the short run and in the long run. O E. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $16 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell subscriptions (enter a numeric response using an integer) and charge a price of $ for profits of $.
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