The information in the table below depicts the total demand for premium channel digital cable TV

subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of

$100,000 (per year) to provide premium digital channels in the market area and that the marginal cost

of providing the premium channel service to a household is zero.

Table 16-1

Quantity Price (per year)

0 $120

3,000 $100

6,000 $ 80

9,000 $ 60

12,000 $ 40

15,000 $ 20

18,000 $ 0

Refer to Table 16-1. Assume that there are two profit-maximizing digital cable TV companies operating in this market. Further assume that they are able to "collude" on price and quantity of premium digital channel subscriptions to sell. As part of their collusive agreement they decide to take an equal share of the market. How much profit will each company make?

a. $170,000

b. $40,000

c. $480,000

d. $540,000

What is the answer and how?