Short Run Pricing Mechanism Quantity (Subscriptions) Price (Dollars per subscription) Profit Long-Run Decision Profit Maximization 8,000 60 Positive Stay in business Marginal-Cost Pricing 16,000 20 Negative Exit the industry Average-Cost Pricing 15,000 25 Zero Stay or exit Suppose that the government forces the monopolist to set the price equal to marginal cost. Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs. True False
Short Run Pricing Mechanism Quantity (Subscriptions) Price (Dollars per subscription) Profit Long-Run Decision Profit Maximization 8,000 60 Positive Stay in business Marginal-Cost Pricing 16,000 20 Negative Exit the industry Average-Cost Pricing 15,000 25 Zero Stay or exit Suppose that the government forces the monopolist to set the price equal to marginal cost. Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs. True False
Chapter9: Monopoly
Section: Chapter Questions
Problem 6SQP
Related questions
Question
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly
Transcribed Image Text:Short Run
Pricing Mechanism
Quantity
(Subscriptions)
Price
(Dollars per subscription)
Profit
Long-Run Decision
Profit Maximization
8,000
60
Positive
Stay in business
Marginal-Cost Pricing
16,000
20
Negative
Exit the industry
Average-Cost Pricing
15,000
25
Zero
Stay or exit
Suppose that the government forces the monopolist to set the price equal to marginal cost.
Complete the second row of the previous table.
Suppose that the government forces the monopolist to set the price equal to average total cost.
Complete the third row of the previous table.
True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs.
True
False
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
