Essay
-The above figure shows the demand for cable and the cable company's cost of providing cable.
a) What price and quantity will be produced if the company is unregulated and profit maximizes?
b) What price and quantity will be produced if the company is regulated using the marginal cost pricing rule?
c) What is the advantage of the marginal cost pricing rule?
d) What price and quantity will be produced if the company is regulated using the average cost pricing rule?
e) What is the advantage of the average cost pricing rule?
Correct Answer:
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a) The price will be $90 per month and t...View Answer
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