Table 17-7 The Information in the Table Below Shows the Total Demand

question 58

Multiple Choice

Table 17-7
The information in the table below shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16.
-Refer to Table 17-7. Suppose there is only one internet radio provider in this market and it seeks to maximize its profit. The company will

• A)sell 2,000 subscriptions and charge a price of $48 for each subscription.
• B)sell 3,000 subscriptions and charge a price of $40 for each subscription.
• C)sell 4,000 subscriptions and charge a price of $32 for each subscription.
• D)sell 5,000 subscriptions and charge a price of $24 for each subscription.

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Definitions:

Labor Costs

Expenses related to the compensation of employees for their work, including wages, salaries, and benefits.

Supply Chain Design

The process of determining the most efficient and effective layout of production, distribution, and inventory facilities along with the selection of suppliers and transportation methods.

Significant Investments

Major financial commitments made by a company or individual, often aiming to achieve long-term benefits or gains.

Short Term

Relating to or occurring on a brief or immediate timescale, typically within a year or less.