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Scenario: A Small-Town Monopolist
A monopolist sells cable subscriptions in a small town and finds that it can sell 100 subscriptions when the price is $15 a week and 175 subscriptions when the price is $10 a week.The MC for the provision of the cable is $5 a week.There are no fixed costs.
-(Scenario: A Small-Town Monopolist)Use Scenario: A Small-Town Monopolist.If this monopolist must choose between selling 100 or 175 subscriptions,it will choose to sell _____ units at a price of _____ and earn economic profits equal to _____.
A) 175;$10;$500
B) 100;$15;$1 000
C) 175;$15;$1 000
D) 100;$10;$750

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Quizplus · Accepted Answer

The monopolist will choose to sell 100 subscriptions at $15 each, earning a profit of ($15 - $5) * 100 = $1,000, as this maximizes profit compared to the other option.

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