Refer to Scenario 13

question 11

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. At what level of output (number of households) is Universal Entertainment's total revenue maximized?

• A) 2,500
• B) 2,750
• C) 5,000
• D) Indeterminate from the given information

---

Definitions:

Price Of Cheeseburgers

The amount of money required to purchase a cheeseburger in a particular market, influenced by factors such as cost of ingredients, demand, and competition.

Supply Shifts

Changes in the supply curve of a product or service due to external factors, leading to a different quantity supplied at each price level.

Equilibrium Price

The price at which the quantity of a good or service supplied equals the quantity demanded in a market, leading to market stability.

Bluetooth Headsets

Wireless earpieces that use Bluetooth technology to connect to various devices, enabling hands-free calling or listening to music.