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) Price 68 64 60 56 Quantity 3 52 48 4 5 172 28 204 32 240 36 364 280 40 384 324 44 Suppose the local government imposes a $99 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60) 6 Total Revenue. 7 8 204 256 300 336 Marginal Revenue 52 44 36 28 20 OA. Comcast should produce 6 units in the short run and shut OB. Comcast should shut down in the short run and in the long run OC. 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 OE. None of the above Total Cost 144 down in the long run Marginal Cost 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 numenc response using an integer) and charge a price of $ for profits of s

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
Section: Chapter Questions
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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
204
256
300
204
336
240
7
364
280
8
384
324
Suppose the local government imposes a $99 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.
O B. Comcast should shut down in the short run and in the long run
OC. 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
OE. None of the above
Price
68
64
60
56
52
48
Quantity
3
4
5
6
Marginal
Revenue
52
44
36
28
20
Total
Cost
144
172
Marginal
Cost
28
32
36
40
44
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 204 256 300 204 336 240 7 364 280 8 384 324 Suppose the local government imposes a $99 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. O B. Comcast should shut down in the short run and in the long run OC. 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 OE. None of the above Price 68 64 60 56 52 48 Quantity 3 4 5 6 Marginal Revenue 52 44 36 28 20 Total Cost 144 172 Marginal Cost 28 32 36 40 44 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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