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A telecom operator is considering deploying ber in downtown Boston. The expected average fixed cost per home is $700. The monthly demand for residential fiber
A telecom operator is considering deploying ber in downtown Boston. The expected average fixed cost per home is $700. The monthly demand for residential fiber in the city has been estimated to be given by q(p) = 180 2p , where q is expressed in thousands of households and p is the price (or charge) per month. The operator estimates a marginal cost of $20 per month for each consumer served. Compute the size of the market (quantity of households that would subscribe service at price 0). Compute total fixed costs assuming that the telecom operator would then build a network to cover all households in the market. Without competition in the market, what price would this telecom operator charge per month for Internet access
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