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Posted: June 15th, 2022

Missouri (Mizzou) ECON 4351 – A monopoly as the only cable television carrier in the city

. In Field City, Clear Imaginative and prescient, Inc. has a monopoly as the only cable television carrier in the city. (Assume for functions of this Question Assignment that Clear Imaginative and prescient just isn’t regulated.) Suppose that demand for cable service is given by P = 28 – zero.0008Q , the place Q is complete market amount of models of service and P is worth per unit of service. Assume that Clear Vision’s brief-run complete value operate is given by TC = 120,000 + zero.0006Q2, and that Clear Vision’s corresponding marginal value operate is given by MC = zero.0012Q . (a) Discover Clear Vision’s revenue-maximizing output and worth. Decide the ensuing revenue for Clear Imaginative and prescient. (b) Suppose that Field City imposes a (particular) tax of t = $1 per unit of service. Discover Clear Vision’s new revenue-maximizing output, worth, and revenue. (Recall that in class we went over how a tax of this type alters the complete value operate and marginal value operate.)

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