Question
Suppose that News Corp., which controls the United States' largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide high speed Internet service.
Suppose that News Corp., which controls the United States' largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide high speed Internet service. Prior to launching the Spaceway satellite, suppose that News Corp. used least squares to estimate the regression line of demand for satellite Internet services. The best-fitting results indicate that demand is Qdsat= 152.5 - 0.8Psat+ 1.2PDSL+ 0.5Pcable(in thousands), wherePsatis the price of satellite Internet service,PDSLis the price of DSL Internet service, andPcableis the price of high-speed cable Internet service.
Suppose that after the FCC's ruling the price of DSL,PDSL, is $25 per month and the monthly price of high-speed cable Internet,Pcable, is $50. Furthermore, News Corp. has identified that its monthly revenues need to be at least $15 million to cover its monthly costs. If News Corp. set its monthly subscription price for satellite Internet service at $55, how much revenue would it earn?
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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
7th Edition
978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234
