Table 17-7 The Information in the Table Below Shows the Total Demand

question 505

Multiple Choice

Table 17-7
The information in the table below shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16.
-Refer to Table 17-7. Assume there are two profit-maximizing internet radio providers operating in this market. Further assume that they are not able to collude on the price and quantity of subscriptions to sell. How many subscriptions will be sold altogether when this market reaches a Nash equilibrium?

• A)2,000
• B)3,000
• C)4,000
• D)5,000

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Definitions:

Ceteris Paribus

A Latin term meaning "all other things being equal," used to isolate the effect of one variable in a economic model.

Variables

Elements, features, or factors that are liable to vary or change, often used in mathematical models or experiments to calculate outcomes or effects.

Positive Statement

An objective statement based on factual evidence that can be tested and validated as true or false.

U.S. Dollar

The official currency of the United States, used as a standard monetary unit for many international transactions.