Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 21, Problem 12DQ
To determine
Difference in the optimum quantity.
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Forty thousand potential customersof a cable TV franchise are each willing to pay $11/month for HBO and $11/month for Cinemax. Twenty thousand potential customers are willing to pay $20/month for HBO and only $5/month for Cinemax. Assume costs are zero.
If the franchise sells the two services in a bundle, it should charge1: $312: $253: $224: $205: $18
q
0
1
2
3
4
5
6
TFC
$5
5
5
5
5
5
5
TVC
$0
3
LO
5
9
16
25
36
MC
-
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4
7
9
11
P = MR
$5
5
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5
LO
5
5
5
A profit-maximizing firm should produce a quantity of
TR
$0
5
10
15
20
25
30
TC
$5
8
10
14
21
30
41
Profit
$-5
- 3
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- 5
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units. (Enter your response as a whole number.)
Fill in the columns in the following table. (Enter your responses as whole numbers.)
TFC
TVC
$5
$0
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1
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4
5
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5
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5
9
16
25
36
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MC P = MR
$5
5
5
5
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LO
5
40
5
5
TR
$0
TC
$5
Profit
$-5
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