The Following Table Shows a Small Community's Demand for Monthly

question 149

Multiple Choice

The following table shows a small community's demand for monthly subscriptions to a streaming movie service.Assume that only two firms (Nextflix and Flixbuster) sell in this market,that each firm offers the same quality of service and movie selection,and that each firm's marginal cost is constant and equal to 0 (zero) due to excess capacity.Use this information to answer the following questions:

-The following list includes four different collusive agreements that Nextflix and Flixbuster are considering.Assuming both firms will abide by the terms,which collusive agreement(s) would maximize total profit in the market?
I.Nextflix supplies 400 subscriptions and Flixbuster supplies 500 subscriptions.
II.Nextflix supplies 500 subscriptions and Flixbuster supplies 300 subscriptions.
III.Nextflix supplies 250 subscriptions and Flixbuster supplies 250 subscriptions.
IV.Nextflix supplies 100 subscriptions and Flixbuster supplies 400 subscriptions.

• A) agreement I
• B) agreements I and II
• C) agreements II and III
• D) agreement IV
• E) agreements III and IV

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Definitions:

Diversity Jurisdiction

a type of jurisdiction that allows federal courts to hear lawsuits between parties from different states or between a U.S. citizen and a foreign government, provided the amount in controversy exceeds a specified threshold.

Federal Question

A legal issue involving the interpretation of the U.S. Constitution, federal laws, or treaties.

Exclusive Jurisdiction

The sole power of a court to adjudicate cases concerning a specific subject matter or parties.

Adoption and Divorce Cases

Legal proceedings that deal with the legal process of adopting a child and the dissolution of marriage, respectively.