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:

Controller

A high-level financial manager responsible for overseeing a company’s accounting and financial reporting processes.

Accounting and Finance

The area of business that deals with the management of money, including tracking income and expenses, and analyzing financial performance.

Total Cost

Total Cost refers to the complete expense incurred in producing, maintaining, and selling a product or service, which includes fixed and variable costs.

Materials Labor

Generally refers to the workforce involved in the handling, preparation, and processing of materials in manufacturing.