In: Economics
The table below shows the total demand for cable TV subscriptions for a monopoly. Assume that the monopolist incurs an annual fixed cost of $100,000 and that the marginal cost of providing an additional subscription is always $100.
Quantity |
Price (per year) |
0 |
$400 |
2,000 |
$350 |
4,000 |
$300 |
6,000 |
$250 |
8,000 |
$200 |
10,000 |
$150 |
12,000 |
$100 |
14,000 |
$50 |
16,000 |
$0 |
B |
|||
Right |
Left |
||
A |
Up |
(2, 2) |
(3, 3) |
Down |
(1, 1) |
(4, 0) |
Critically analyze the following (remember to justify your answers):