Eleven Consumers Are Trying to Decide Whether to Connect to a New

question 5

Multiple Choice

Eleven consumers are trying to decide whether to connect to a new communications network.Consumer 1 is of type 1, consumer 2 is of type 2, consumer 3 is of type 3, and so on.Where k is the number of consumers connected to the network (including oneself) , a consumer of type n has a willingness to pay to belong to this network equal to k times n.What is the highest price at which 4 consumers could all connect to the network and either make a profit or at least break even?

• A)$24
• B)$40
• C)$64
• D)$28
• E)$32

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Definitions:

Skeleton

The internal framework of the body, composed of bones and cartilage, that provides support, protects organs, and allows movement.

Radioactive Substance

A material containing unstable atoms that release radiation as they decay.

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A medical specialty that uses small amounts of radioactive material to diagnose and treat a variety of diseases.