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Table 18-2 The information in the following table shows the total demand for internet radio subscriptions in a small urban market. Assume that each company
Table 18-2 The information in the following table shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16. Quantity Demanded (Internet radio subscriptions) Price (Dollars per subscription per year) 0 64 500 60 1,000 56 1,500 52 2,000 48 2,500 44 3,000 40 3,500 36 4,000 32 4,500 28 5,000 24 5,500 20 6,000 16 6,500 12 7,000 8 7,500 4 8,000 0 Refer to Table 18-2. Suppose there is only one internet radio provider in this market and it seeks to maximize its profit. The company will a. sell 4,000 subscriptions and charge a price of $32 for each subscription. b. sell 2,000 subscriptions and charge a price of $48 for each subscription. c. sell 3,000 subscriptions and charge a price of $40 for each subscription. d. sell 5,000 subscriptions and charge a price of $24 for each subscription
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