The following 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 following questions:

-If this market were highly competitive instead of a duopoly,the market price would be __________ and the quantity of streaming movie subscriptions purchased each month would be __________.
A) $0; 1,000
B) $2; 800
C) $4; 600
D) $6; 400
E) $8; 800

Question

The following 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 following questions:
 
-If this market were highly competitive instead of a duopoly,the market price would be __________ and the quantity of streaming movie subscriptions purchased each month would be __________.
A) $0; 1,000 
B) $2; 800 
C) $4; 600 
D) $6; 400 
E) $8; 800

Quizplus · Accepted Answer

In a highly competitive market, firms will compete to offer the lowest price possible to attract customers, leading to a market price of zero in this case. The quantity demanded at a price of zero is 1,000, which is when the entire community would subscribe to the streaming service. Therefore, the answer is A) $0; 1,000.

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