The information in the following table shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per ye and that the marginal cost of providing an additional subscription is always $16. O a. $60,000 Ob. $44,000 O c. $16,000 O d. $12,000 Table 18-2 Quantity Demanded (Internet radio subscriptions) 0 500 1,000 1,500 2.000 2.500 3,000 3.500 4,000 4.500 5.000 5.500 6.000 6.500 7.000 7,500 8.000 Price (Dollars per subscription per year) 64 60 56 52 48 44 40 36 32 28 24 20 16 12 8 4 0 Refer to Table 18-2. Assume there are two profit-maximizing internet radio providers operating in this market. Further assume that they are able to collude on the quantity of subscriptions that will be sold and on the price that be charged for subscriptions. If the firms divide the market evenly, how much profit will each company earn?

The information in the following table shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per ye and that the marginal cost of providing an additional subscription is always $16. O a. $60,000 Ob. $44,000 O c. $16,000 O d. $12,000 Table 18-2 Quantity Demanded (Internet radio subscriptions) 0 500 1,000 1,500 2.000 2.500 3,000 3.500 4,000 4.500 5.000 5.500 6.000 6.500 7.000 7,500 8.000 Price (Dollars per subscription per year) 64 60 56 52 48 44 40 36 32 28 24 20 16 12 8 4 0 Refer to Table 18-2. Assume there are two profit-maximizing internet radio providers operating in this market. Further assume that they are able to collude on the quantity of subscriptions that will be sold and on the price that be charged for subscriptions. If the firms divide the market evenly, how much profit will each company earn?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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