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

question 105

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.Profit-maximizing two-part pricing yields total revenue of

• A) $24.
• B) $40.
• C) $16.
• D) $32.

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Definitions:

Odds

A ratio representing the probability that a particular event will take place compared to the probability that it will not.

Logistic Regression

A statistical method used for modeling the outcome of a binary dependent variable based on one or more predictor variables.

Test Statistic

A value calculated from sample data to evaluate a hypothesis in statistics.

Wald Statistic

A statistic used to test the significance of individual coefficients in the context of a larger model.