-The Figure Above Shows the Demand Curve (D) Faced by Visual

question 204

Multiple Choice

-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR) , marginal cost (MC) , and average cost (LRAC) curves. If Visual is regulated according to the social interest theory, it will serve ________ million households and set a price of ________ per household per month.

• A) 2; $12
• B) 3; $24
• C) 4; $12
• D) 2; $36

---

Definitions:

Marginal Utility

The bonus utility or pleasure experienced by someone when consuming another unit of a given good or service.

Risk-averse

A description of an individual's or entity's preference for avoiding loss over making a gain.

Expected Income

The income an individual anticipates to earn in the future based on current circumstances, potential investments, and employment prospects.

Utility Maximizer

An economic agent who seeks to achieve the highest level of satisfaction or utility from their choices, given their constraints.