Name:
Location: Halstead, Kansas, United States

This is my seventh year at Halstead which is also where I live with my wife and my soon to be two year old daughter.

Sunday, January 23, 2005

Economics Online Question #1

Stickemup Cable Company is the only cable television company licensed to operate in HarveyCounty. Most of its costs are access fees and overhead expenses. These fixed costs total $750,000 monthly. The marginal cost of adding another subscriber to its system is $2 per month. Stickemup's demand curve is described in the table below:

Subscription Price..............Number of Subscribers
(per month)
$25......................................20,000
20.......................................40,000
15........................................60,000
10........................................80,000
5..........................................100,000
1..........................................150,000

a) At what price is the total revenue the highest for Stickemup cable? What price will Stickemup charge for its cable services? What are its profits at this price?

4 Comments:

Anonymous Anonymous said...

Mr. Warsnak is wonderful

11:32 AM  
Anonymous Anonymous said...

1. $15 dollars per month
2. $15 dollars
3. $30,000 dollar profit per month
Aaron McDaniel

11:21 PM  
Anonymous Anonymous said...

1. $15 per month
2. $15
3. $30,000 profit per month.

Kara Lankton

12:02 PM  
Blogger Mr. Warsnak said...

McDaniel was the first to get the answer correct. He recieves 20 out of 20. A new question will appear sometime this wekend.

7:01 PM  

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