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19: Consider two internet service providers: ISP West and ISP East, offering internet access to a small town in north Kansas. They both have some
19: Consider two internet service providers: ISP West and ISP East, offering internet access to a small town in north Kansas. They both have some estimations of the price elasticity of the demand facing them: Estimated Price Elasticity for ISP West: -1.25 Estimated Price Elasticity for ISP East:-1.125 They also have some estimations of their marginal cost, as defined by the monthly cost of adding one new unit (e.g., house, office, etc.) to their internet service network: Estimated Marginal Cost for ISP West: $23 Estimated Marginal Cost for ISP East: $30 Assuming that ISP West and ISP East engage in a Cournot duopoly, the profit maximizing price for ISP West is _____dollars? Question 20: Consider your answer to Question No. 19 and the Mark-Up Index (MI=(P*-MC)/MC) introduced in Question No. 11. With the Mark-Up Index for ISP West is____ ? Question 21: Assuming that ISP West and ISP East engage in a Cournot duopoly, the profit maximizing price for ISP East is _____ dollars. Question 22: Consider your answer to Question No. 21 and the Mark-Up Index (MI=(P*-MC)/MC) introduced in Question No. 11. Compute the Mark-Up Index for ISP East
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