Refer to Scenario 13

question 236

Multiple Choice

Refer to Scenario 13.1 below to answer the question(s) that follow.
SCENARIO 13.1: The government of Catalina Island is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P = 55 - 0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR = 55 - 0.02Q. Universal Entertainment is interested in bidding for the right to provide cable service on Catalina Island. It has a constant average and marginal cost of $15 for providing cable service to each household.
-Refer to Scenario 13.1. What is the most Universal Entertainment would bid for the franchise?

• A) $0
• B) $40,000
• C) $70,000
• D) $80,000

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Definitions:

Analogous Structures

Physical structures in different species that perform similar functions but have evolved independently, hence do not share a common ancestor.

Charles Lyell

A geologist known for popularizing the concept of uniformitarianism, the idea that the earth’s features are the result of long-term processes that continue to operate in the present.

Nonreligious Theory

A theoretical approach or explanation that does not involve religious beliefs or supernatural elements.

Classification

The process of arranging or organizing items into categories based on their similarities or differences.