Multiple Choice
Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2) q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. The profit maximizing two-part tariff results in the firm selling
A) 4.5 hours.
B) 10 hours.
C) 5 hours.
D) 8 hours.
Correct Answer:
Verified
Correct Answer:
Verified
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