Question

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 year) and that the marginal cost of providing an additional subscription is always $16. Quantity Demanded Price (Internet radio (Dollars per subscription subscriptions) per year) 0 64 500 60 1,000 56 1,500 52 2,000 48 2,500 44 3,000 40 3,500 36 4,000 32 4,500 28 5,000 24 5,500 20 6,000 16 6,500 12 7,000 8 7,500 4 8,000 0 Refer to Table 17-2. 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 will be charged for subscriptions. If the firms divide the market evenly, how much profit will each company earn? Oa. $60,000 Ob. $12,000 Oc. $44,000 Od. $16,000

          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
year) and that the marginal cost of providing an additional subscription is always $16.
Quantity Demanded
Price
(Internet radio
(Dollars per subscription
subscriptions)
per year)
0
64
500
60
1,000
56
1,500
52
2,000
48
2,500
44
3,000
40
3,500
36
4,000
32
4,500
28
5,000
24
5,500
20
6,000
16
6,500
12
7,000
8
7,500
4
8,000
0
Refer to Table 17-2. 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
will be charged for subscriptions. If the firms divide the market evenly, how much profit will each company earn?
Oa. $60,000
Ob. $12,000
Oc. $44,000
Od. $16,000

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
year) and that the marginal cost of providing an additional subscription is always16.
Quantity Demanded
Price
(Internet radio
(Dollars per subscription
subscriptions)
per year)
0
64
500
60
1,000
56
1,500
52
2,000
48
2,500
44
3,000
40
3,500
36
4,000
32
4,500
28
5,000
24
5,500
20
6,000
16
6,500
12
7,000
8
7,500
4
8,000
0
Refer to Table 17-2. 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
will be charged for subscriptions. If the firms divide the market evenly, how much profit will each company earn?
Oa. 60,000
Ob.12,000
Oc. 44,000
Od.16,000

Added by Brianna B.

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