1. Business
  2. Economics
  3. the information in the table below shows the total demand...

Question: the information in the table below shows the total demand...

Question details

The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $100,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero Quantity 0 3,000 6,000 9,000 12,000 15,000 18,000 Price (per year) $120 $100 $ 80 $ 60 $40 $20 Refer to Table 16-3. Assume that there are two profit-maximizing digital cable TV companies operating in this market. Further assume that they are not able to collude on the price and quantity of premium digital channel subscriptions to sell. How many premium digital channel cable TV subscriptions will be sold altogether when this market reaches a Nash equilibrium? Assume if one firm produced 6,000 and the other 4,500 units, the market price would be $50, and each individual firm can only change their output in increments of 1,500 units 9,000 3,000 6,000 12,000

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution