Table 17-4

question 14

Multiple Choice

Table 17-4. The information in the table below shows the total demand for high-speed Internet subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $200,000 (per year) and that the marginal cost of providing an additional subscription is always $80.

-Refer to Table 17-4.Assume there are two high-speed Internet service providers operating in this market.Further assume that they are not able to collude on the price and quantity of subscriptions to sell.What price will they charge for a subscription when this market reaches a Nash equilibrium?

• A) $120
• B) $160
• C) $200
• D) $240

---

Definitions:

Fixed Cost

Costs that do not change with the level of output or production, such as rent, salaries, and insurance.

Market Price

The actual selling price of a good or service in the marketplace at any given time.

Marginal Revenue

The increase in income a business achieves through the sale of one extra unit of a product or service.

Marginal Cost

The extra charge involved in producing an additional unit of a product or service.