Table 15-3 Assume Table 15-3 Gives the Monthly Demand and Costs for Monthly

question 29

Multiple Choice

Table 15-3

Assume Table 15-3 gives the monthly demand and costs for subscriptions to basic cable for Comcast, a cable television monopoly in Philadelphia.
-Refer to Table 15-3.If Comcast maximizes its profits how much profit will it earn?

• A)$84
• B)$40
• C)$4
• D)Comcast will break even.

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Definitions:

Maximum Price

A price ceiling set by the government to prevent prices from soaring to levels that are too high for most consumers to afford.

Profit-maximizing Level

The output level at which a firm achieves the highest profit, where marginal cost equals marginal revenue.

Pure Monopolist

A single seller in a market that produces a unique product or service without close substitutes, controlling the entire supply.

Fair Return

A profit level that allows a business to maintain its operations and justify the risk of investment, often considered in regulatory contexts.