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

question 133

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The accompanying 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 thequestions.  Price/Month(P)   Number of Customers (Q)   Total Revenus/Month (TR)  $100$0$9100$900$8200$1,600$7300$2,100$6400$2,400$5500$2,500$4600$2,400$3700$2,100$2800$1,600$1900$900$01000$0\begin{array}{lrr}\text { Price/Month(P) }&\text { Number of Customers (Q) }&\text { Total Revenus/Month (TR) }\\\$ 10 & 0 & \$ 0 \\\$ 9 & 100 & \$ 900 \\\$ 8 & 200 & \$ 1,600 \\\$ 7 & 300 & \$ 2,100 \\\$ 6 & 400 & \$ 2,400 \\\$ 5 & 500 & \$ 2,500 \\\$ 4 & 600 & \$ 2,400 \\\$ 3 & 700 & \$ 2,100 \\\$ 2 & 800 & \$ 1,600 \\\$ 1 & 900 & \$ 900 \\\$ 0 & 1000 & \$ 0\end{array}
-Listed below are four different collusive agreements that Nextflix and Flixbuster are considering. Assuming both firms will abide by the terms, which collusive agreement(s) would maximize total profit in the market? I. Nextflix supplies 400 subscriptions and Flixbuster supplies 500 subscriptions.
II) Nextflix supplies 500 subsciptions and Flixbuster supplies 300 subscriptions.
III) Nextflix supplies 250 subscriptions and Flixbuster supplies 250 subscriptions.
IV) Nextflix supplies 100 subscriptions and Flixbuster supplies 400 subscriptions.

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Definitions:

Fiscal Policy

Government policies regarding taxation and spending that influence the economy by changing the level of income and aggregate demand.

Welfare Programs

Governmental provisions designed to support the well-being of citizens in need, including financial assistance, healthcare, and food support.

Income Taxes

Taxes that individuals or entities pay on the money they earn over a certain period, typically a year.

Annually Balanced Budget

A financial statement showing that projected government revenues equal expected expenditures on an annual basis.

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