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:

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for physical activity by accelerating the heart rate, increasing blood pressure, and dilating the airways, among other responses.

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and promoting relaxation and recovery after periods of stress.

Digestion

The biological process by which the body breaks down food into absorbable nutrients.

James-Lange Theory

A theory of emotion proposing that emotions occur as a result of physiological reactions to events.