The accompanying table shows a small community's demand for monthly subscriptions to a streaming movie service.Assume that only two firms (Nextflix and Flixbuster)sell in this market,that each firm offers the same quality of service and movie selection,and that each firm's marginal cost is constant and equal to 0 (zero)due to excess capacity.Use this information to answer the questions that follow.

-If the two firms operating in this market agreed to each supply one-half of the quantity a monopolist would supply,the contract would specify that:

Question

The accompanying table shows a small community's demand for monthly subscriptions to a streaming movie service.Assume that only two firms (Nextflix and Flixbuster)sell in this market,that each firm offers the same quality of service and movie selection,and that each firm's marginal cost is constant and equal to 0 (zero)due to excess capacity.Use this information to answer the questions that follow.
 
-If the two firms operating in this market agreed to each supply one-half of the quantity a monopolist would supply,the contract would specify that:

Quizplus · Accepted Answer

To find the quantity that a monopolist would supply, we need to find the quantity where marginal revenue equals marginal cost. Looking at the table, we can see that the monopolist would supply 500 subscriptions at a price of $6.

If the two firms agree to each supply one-half of the quantity a monopolist would supply, they would each supply 250 subscriptions. This is because they are each supplying half of the monopolist's quantity, so they would each supply (1/2) * 500 = 250 subscriptions. Therefore, the correct answer is E.

The Accompanying Table Shows a Small Community's Demand for Monthly