4. Consider the diagram on the next page, which depicts the supply of broadband Internet service.

The supply of broadband service is given by Q S = 12.5P – 150, where Q is the quantity of services (in hundreds) and P is the price per month. Assume that the price of broadband service is $25 per month. Determine the following, paying particular attention to the units in which quantity is denominated:

a. The total number of services providers will supply at that price

b. The total amount received by producers for that service, areas D and E

c. The producer surplus received by suppliers, area D

Transcribed Image Text:

Price (S/month) $25 12- D E 0 ? S Quantity of broadband services (100s of subscribers)