Table 17-5 The Information in the Table Below Shows the Total Demand

question 511

Multiple Choice

Table 17-5
The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero.
-Refer to Table 17-5. Assume there are two digital cable TV companies operating in this market. If they are able to collude on the quantity of subscriptions that will be sold and on the price that will be charged for subscriptions, then their agreement will stipulate that

• A)each firm will charge a price of $90 and each firm will sell 4,500 subscriptions.
• B)each firm will charge a price of $90 and each firm will sell 9,000 subscriptions.
• C)each firm will charge a price of $120 and each firm will sell 3,000 subscriptions.
• D)each firm will charge a price of $150 and each firm will sell 1,500 subscriptions.

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Definitions:

Strategic Planning

The process of defining an organization's strategy and making decisions on allocating its resources to pursue this strategy.

Key Persons

Individuals who hold critical importance within an organization or project, often due to their skills, knowledge, or position.

BCG Matrix

A strategic business tool designed by the Boston Consulting Group to help organizations evaluate and manage the relative positions of their business units or products in terms of market growth rate and market share.

Stars

High-performing and highly valuable members or units within an organization known for contributing significantly to its success.