Last Week, the Local Pay TV Company Lowered the Monthly

question 194

Multiple Choice

Last week, the local pay TV company lowered the monthly pay TV price because the city council has granted approval for three new pay TV companies to service the area. How is the market for pay TV services affected by this?

• A)There is an increase in the supply of pay TV service.
• B)There is a decrease in the demand for pay TV service.
• C)There is a decrease in the quantity of pay TV service supplied.
• D)There is a decrease in the supply of pay TV service.

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Definitions:

Economies of Scale

The cost advantage organizations achieve due to an increase in scale of production, leading to a reduction in the per-unit cost.

Indirect Materials

Items that are used during the production process but do not become part of the final product, such as lubricants for machinery or cleaning supplies.

Bulk Purchase Items

Products bought in large quantities, typically at a discounted price, for the purpose of reselling or for use over an extended period.

Total Cost

The sum of all expenses incurred in the process of producing or offering a product or service, including direct and indirect costs.