Suppose All Individuals Are Identical, and Their Monthly Demand for Internet

question 72

Multiple Choice

Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2) q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. The profit maximizing two-part tariff results in the firm selling

• A)4.5 hours.
• B)10 hours.
• C)5 hours.
• D)8 hours.

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