Figure 15-11 In 2011, Verizon Was Granted Permission to Enter the Market

question 142

Multiple Choice

Figure 15-11

In 2011, Verizon was granted permission to enter the market for cable TV in Upstate New York, ending the virtual monopoly that Time Warner Cable had in most local communities in the region. Figure 15-11 shows the cable television market in Upstate New York.
-Refer to Figure 15-11.Following the entry of Verizon, the subscription price falls from PM to PC.What is the increase in consumer surplus as a result of this change?

• A)the area A + B + C
• B)the area B + C
• C)the area D + F
• D)the area B + C + D

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Definitions:

Pretax Income

The total income earned by an individual or a business before any taxes are deducted.

Unemployment Compensation

Unemployment compensation refers to the financial assistance provided by the government to unemployed workers who meet certain eligibility criteria, aiming to reduce the economic burden of unemployment.

Employers

Entities or individuals that hire and employ workers, providing compensation in exchange for the performance of job duties and contributing to the labor market dynamics.

Lorenz Curve

The Lorenz curve is a graphical representation of the distribution of income or wealth within a society, illustrating inequalities.