Scenario 15-3 Black Box Cable TV Is Able to Purchase an Exclusive

question 45

Multiple Choice

Scenario 15-3
Black Box Cable TV is able to purchase an exclusive right to sell a premium movie channel (PMC) in its market area.Let's assume that Black Box Cable pays $150,000 a year for the exclusive marketing rights to PMC.Since Black Box has already installed cable to all of the homes in its market area, the marginal cost of PMC to subscribers is zero.The manager of Black Box needs to know what price to charge for the PMC service to maximize her profit.Before setting price, she hires an economist to estimate demand for the PMC service.The economist discovers that there are two types of subscribers who value premium movie channels.First are the 4000 die-hard TV viewers who will pay as much as $150 a year for the new PMC premium channel.Second, the PMC channel will appeal to about 20,000 occasional TV viewers who will pay as much as $25 a year for a subscription to PMC.
-Refer to Scenario 15-3.What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price discriminating policy

• A)$300,000
• B)$400,000
• C)$500,000
• D)​$600,000

Understand regulatory and operational dynamics in global contexts affecting nonprofit organizations.

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Identify the role and impact of philanthropy internationally.

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Definitions:

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity of that good that suppliers are willing to sell.

Mushrooms

Fungi that grow above ground or on a food source and are often used in cooking for their flavor and nutritional value.

Gardenburgers

A brand of meatless burgers, typically made from vegetables, grains, and legumes, catering to vegetarians or those seeking alternative diet options.

Gardenburgers

A brand or type of meatless burgers made from vegetables and other plant-based ingredients.