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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 Total Revenue Cost 153 192 225 252 273 288 Quantity 3 4 Marginal Revenue Price 51 48 45 42 39 36 Suppose the local government imposes a $73 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $45.) OA. Comcast should produce 6 units in the short run and in the long run. OB. Comcast should shut down in the short run and produce 6 units in the long run. OC. Comcast should produce 6 units in the short run and shut down in the long run. O D. Comcast should shut down in the short run and in the long run. OE. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $3 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell for profits of $ subscriptions (enter a numeric response using an integer) and charge a price of $ 5 6 7 8 39 33 27 21 15 Marginal Cost 108 129 153 180 210 243 21 24 27 30 33

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 Total Revenue Cost 153 192 225 252 273 288 Quantity 3 4 Marginal Revenue Price 51 48 45 42 39 36 Suppose the local government imposes a $73 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $45.) OA. Comcast should produce 6 units in the short run and in the long run. OB. Comcast should shut down in the short run and produce 6 units in the long run. OC. Comcast should produce 6 units in the short run and shut down in the long run. O D. Comcast should shut down in the short run and in the long run. OE. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $3 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table). To maximize profit, Comcast will sell for profits of $ subscriptions (enter a numeric response using an integer) and charge a price of $ 5 6 7 8 39 33 27 21 15 Marginal Cost 108 129 153 180 210 243 21 24 27 30 33

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 Cost Total Revenue 153 192 225 252 273 288 Marginal Revenue Price Quantity 51 3 48 4 39 45 5 33 42 6 27 39 7 21 36 8 15 Suppose the local government imposes a $73 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $45.) 108 129 153 180 210 243 Marginal Cost 21 24 27 30 33 O A. Comcast should produce 6 units in the short run and in the long run. OB. Comcast should shut down in the short run and produce 6 units in the long run. OC. Comcast should produce 6 units in the short run and shut down in the long run. O D. Comcast should shut down in the short run and in the long run. OE. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $3 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 Cost Total Revenue 153 192 225 252 273 288 Marginal Revenue Price Quantity 51 3 48 4 39 45 5 33 42 6 27 39 7 21 36 8 15 Suppose the local government imposes a $73 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $45.) 108 129 153 180 210 243 Marginal Cost 21 24 27 30 33 O A. Comcast should produce 6 units in the short run and in the long run. OB. Comcast should shut down in the short run and produce 6 units in the long run. OC. Comcast should produce 6 units in the short run and shut down in the long run. O D. Comcast should shut down in the short run and in the long run. OE. None of the above. Suppose that the flat per-month tax is replaced with a tax on the firm of $3 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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