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

question 92

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:

-If the two firms operating in this market agreed to each supply one-half of the quantity a monopolist would supply,the contract would specify that

• A) Nextflix supplies 400 subscriptions and Flixbuster supplies 100 subscriptions.
• B) Flixbuster supplies 400 subscriptions and Nextflix supplies 100 subscriptions.
• C) Nextflix supplies 0 (zero)subscriptions and Flixbuster supplies 500 subscriptions.
• D) Flixbuster supplies 0 (zero)subscriptions and Nextflix supplies 500 subscriptions.
• E) Nextflix supplies 250 subscriptions and Nextflix supplies 250 subscriptions.

---

Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes.

Simple Thinking

The process of considering or reasoning in a straightforward or uncomplicated manner.

Solve Problems

To find solutions or answers to difficult situations or questions through analysis and applied strategies.

Concept

An abstract idea or a mental symbol that represents a specific thing, thought, or group of things, often defining how something is perceived or understood.