Three firms are bidding for the rights to provide cable television services. The demand for cable television is given by the equation P=100-Q. Firm 1 has an average cost of AC1 = 10, Firm 2 has an average cost of AC2 = 20, and Firm 3 has an average cost of AC3 = 30. If the rights are awarded using an English auction, approximately what is the resulting price and quantity of services provided? (A). P= 10; Q = 90. (B). P = 20; Q = 80. (C). P = 30; Q = 70. (D). P = 20; Q = 90. (E). P = 10; Q = 80
Three firms are bidding for the rights to provide cable television services. The demand for cable television is given by the equation P=100-Q. Firm 1 has an average cost of AC1 = 10, Firm 2 has an average cost of AC2 = 20, and Firm 3 has an average cost of AC3 = 30. If the rights are awarded using an English auction, approximately what is the resulting price and quantity of services provided? (A). P= 10; Q = 90. (B). P = 20; Q = 80. (C). P = 30; Q = 70. (D). P = 20; Q = 90. (E). P = 10; Q = 80
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Three firms are bidding for the rights to provide cable television services. The demand for cable television is given by the equation P=100-Q. Firm 1 has an average cost of AC1 = 10, Firm 2 has an average cost of AC2 = 20, and Firm 3 has an average cost of AC3 = 30. If the rights are awarded using an English auction, approximately what is the resulting price and quantity of services provided?
(A). P= 10; Q = 90.
(B). P = 20; Q = 80.
(C). P = 30; Q = 70.
(D). P = 20; Q = 90.
(E). P = 10; Q = 80.
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