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Suppose that Shaw Communications has a cable monop_o|y_ in Vancouver. The following table gives Shaw's demand and costs per month for subscriptions to basic cable
Suppose that Shaw Communications has a cable monop_o|y_ in Vancouver. The following table gives Shaw's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers articially small). Assume fixed costs equal $45. Total Marginal Total Marginal Price Quantity Revenue Revenue Cost Cost $51.00 3 $153.00 $108.00 48.00 4 192.00 39.00 129.00 21.00 45.00 5 225.00 33.00 153.00 24.00 42.00 6 252.00 27.00 180.00 27.00 39.00 7 273.00 21.00 210.00 30.00 36.00 8 288.00 15.00 243.00 33.00 a. Suppose the local government imposes a $75 per month tax on cable companies. What will Shaw do? .;' A. Shaw should produce 6 units in the short run and in the long run. . Shaw should shut down in the short run and in the long run. . Shaw should shut down in the short run and produce 6 units in the long run. . Shaw should produce 6 units in the short run and shut down in the long run. None of the above
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