Table 17-7 The Information in the Table Below Shows the Total Demand

question 130

Multiple Choice

Table 17-7
The information in the table below shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16.
-Refer to Table 17-7. Assume that there are two profit-maximizing internet radio providers operating in this market. Further assume that they are not able to collude on the price and quantity of subscriptions to sell. How much profit will each firm earn when this market reaches a Nash equilibrium?

• A)$12,000
• B)$16,000
• C)$52,000
• D)$64,000

Analyze the impact of demand variability on pricing and inventory decisions.

Identify strategies for managing wasted capacity and capacity shortages.

Calculate optimal pricing to maximize revenue in variable demand scenarios.

Understand the role of revenue management in maximizing supply chain profits.

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