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e 1: The residents of Beaux-Armes, Louisiana, regard cable TV service, as provided by Stan Cable, and satellite TV service, as provided by Stellar Satellite, as imperfect substitutes, or differentiated products 2 3 A consultant from the big city university has estimated the (monthly) demands for cable TV and satellite TV 5 services in Beaux-Armes as 6 lc (PC, P's) = 80-Pc + PS (Cable) Q's (PC, PS) = 80-Ps + Pc (Satellite) 8 9 The costs of providing TV service are entirely fixed connection and infrastructure costs, so the marginal cost of providing TV service (either cable or satellite) is ZERO Stan Cable and Stellar Satellite are Bertrand competitors, competing on the basis of Price. In Bertrand equilibrium, how much profit is earned each month by Stellar Satellite? Does Stan Cable earn more profit, less profit, or the same profit as Stellar Satellite? ( 1) Stellar Satellite Bertrand Profit $7,500, Stan Cable Profit greater than Stellar Satellite Profit (3) Stellar Satellite Bertrand Profit $7,500, Stan Cable Profit the same as Stellar Satellite Profit ( 5) Stellar Satellite Bertrand Profit > $7,500, Stan Cable Profit less than Stellar Satellite Profit