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

question 304

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 using rate of return regulation, and the regulator knows the firm's costs curves, the company will serve ________ million households and set a price of ________ per household per month.

• A) 2.5; $30
• B) 3; $24
• C) 4; $12
• D) 2; $36

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Definitions:

Burritos

A traditional Mexican dish consisting of a wheat flour tortilla wrapped or folded around a filling.

Marginal Revenue

The additional income that a firm generates from selling one more unit of a good or service.

Graphing Calculators

Portable, handheld calculators capable of plotting graphs, solving simultaneous equations, and performing other tasks with variables.

Monopoly

A market structure characterized by a single seller selling a unique product in the market.