Suppose the demand function for cable TV service is given by Q_CTV = 15 - 0.25xP_CTV + 0.0005xM + 0.3xP_STV,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.Suppose consumers' income is $50,000 and the price of satellite TV service is $90.At what price would the demand for cable TV services be 55,000 households? A) $67 B) $48 C) $12 D) There is not enough information to answer the question

Question

Quizplus · Accepted Answer

To find the price at which the demand for cable TV services is 55,000 households, we need to solve the demand equation for P:

55 = 15 - 0.25P + 0.0005(50,000) + 0.3(90)

Simplifying and solving for P, we get:

P = ($67,000 - 220M)/1000

Substituting M=50,000 and simplifying, we get:

P = $48

Therefore, the price at which the demand for cable TV services is 55,000 households is $48.

Suppose the Demand Function for Cable TV Service Is Given