Suppose the demand function for cable TV service is given by Q_CTV = 15 - 0.25 × P_CTV + 0.0005 × M + 0.3 × P_STV,where Q_CTV is the quantity of cable TV demanded (thousands of households),P_CTV is the price of cable TV,M is income and P_STV is the price of satellite TV service.If consumers' income is $50,000 and the price of satellite TV service is $90,then which of the following gives the demand curve for cable TV? A) Q_CTV = 17 - 0.25 × P_CTV B) Q_CTV = 67 - 0.25 × P_CTV C) Q_CTV = 15 - 0.25 × P_CTV + 0.0005 × M + 0.3 × P_STV D) Q_CTV = 13 - 0.25 × P_CTV

Question

Quizplus · Accepted Answer

Substituting the given values of M ($50,000) and P_STV ($90) into the demand function, we get Q_CTV = 15 - 0.25 × P_CTV + 0.0005 × 50000 + 0.3 × 90. This simplifies to Q_CTV = 67 - 0.25 × P_CTV, making option B correct.

Suppose the Demand Function for Cable TV Service Is Given