Table 10-3
$\begin{array}{|c|c|c|c|c|c|}
\hline \text { Price } & \text { Quantity } & \begin{array}{l}
\text { Total } \
\text { Revenue }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue }
\end{array} & \text { Total Cost } & \begin{array}{c}
\text { Marginal } \
\text { Cost }
\end{array} \
\hline \$ 17 & 3 & \$ 51 & \cdots & \$ 56 & \cdots \
\hline 16 & 4 & 64 & \$ 13 & 63 & \$ 7 \
\hline 15 & 5 & 75 & 11 & 71 & 8 \
\hline 14 & 6 & 84 & 9 & 80 & 9 \
\hline 13 & 7 & 91 & 7 & 90 & 10 \
\hline 12 & 8 & 96 & 5 & 101 & 11 \
\hline
\end{array}$ Assume Table 10-3 gives the monthly demand and costs for subscriptions to basic cable for Comcast, a cable television monopoly in Philadelphia.
-Refer to Table 10-3.If Comcast wants to maximize its profits,what price (P)should it charge and how many cable subscriptions per month (Q)should it sell?
A) P = $12; Q = 8
B) P = $14; Q = 6
C) P = $16; Q = 4
D) P = $15: Q = 5

Question

Table 10-3
 $\begin{array}{|c|c|c|c|c|c|}
\hline \text { Price } & \text { Quantity } & \begin{array}{l}
\text { Total } \
\text { Revenue }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Revenue }
\end{array} & \text { Total Cost } & \begin{array}{c}
\text { Marginal } \
\text { Cost }
\end{array} \
\hline \$ 17 & 3 & \$ 51 & \cdots & \$ 56 & \cdots \
\hline 16 & 4 & 64 & \$ 13 & 63 & \$ 7 \
\hline 15 & 5 & 75 & 11 & 71 & 8 \
\hline 14 & 6 & 84 & 9 & 80 & 9 \
\hline 13 & 7 & 91 & 7 & 90 & 10 \
\hline 12 & 8 & 96 & 5 & 101 & 11 \
\hline
\end{array}$ Assume Table 10-3 gives the monthly demand and costs for subscriptions to basic cable for Comcast, a cable television monopoly in Philadelphia.
-Refer to Table 10-3.If Comcast wants to maximize its profits,what price (P)should it charge and how many cable subscriptions per month (Q)should it sell?
A) P = $12; Q = 8
B) P = $14; Q = 6
C) P = $16; Q = 4
D) P = $15: Q = 5

Quizplus · Accepted Answer

To maximize profit, Comcast should produce the quantity of cable subscriptions where marginal revenue equals marginal cost (MR = MC). Looking at the table, we can see that the marginal revenue decreases as the quantity increases. The marginal cost increases as the quantity increases.

So, the point of maximum profit will be a point where both marginal revenue and marginal cost are equal. This point is $14 and 6 subscriptions as shown in the table. Therefore, the correct answer is B) P = $14; Q = 6.

Table 10-3 Assume Table 10-3 Gives the Monthly Demand and Costs for Quantity