Consider the Following Information for a Regional Cable Television Service

question 61

Multiple Choice

Consider the following information for a regional cable television service provider that is a natural monopoly and has a U-shaped long-run average cost curve.(Assume the service provided is basic cable and units are household connections.) - minimum LRAC = $9.00 per month
- minimum efficient scale = 2 million units
- current output = 1.7 million units
- current LRAC = $10.25 per month
Suppose the firm is currently being regulated and is required to follow a marginal-cost pricing policy.The price of the service will be ________ per month.

• A)lower than $9.00
• B)$9.00
• C)lower than $10.25
• D)$10.25
• E)higher than $10.25

---

Definitions:

Mediators

Third-party individuals who intervene in disputes or negotiations to help reach a settlement or agreement, without having the authority to make a binding decision.

Challenge and Performance

The relationship where increased levels of challenges lead to higher performance if the individual is motivated and has the necessary skills.

Moderators

Variables that influence the strength or direction of the relationship between independent and dependent variables in research or analysis.

Situational Constraints

Describes factors in the environment that can limit the effectiveness of a decision or action, including resources, time, and organizational structure.