Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The options in the drop down menu are 1, 5, 10, 15, 20, 25 4 . Critical analysis Q13 Gouge-em Cable Company is the only
The options in the drop down menu are 1, 5, 10, 15, 20, 25
4 . Critical analysis Q13 Gouge-em Cable Company is the only cable television service company licensed to operate in Backwater County. Most of its costs are access fees and maintenance expenses. These fixed costs total $320,000 monthly. The marginal cost of adding another subscriber to its system is constant at $6 per month. Gouge-em's demand curve can be determined from the data in the accompanying table. Complete the following table by computing the total revenue, total cost, and profit at each of the various subscription prices. Subscription Price $25 20 15 10 5 1 Gouge-em will charge Number of Subscribers (Thousands Per Month) 20 40 60 80 100 150 Total Revenue ($, Thousands) Fixed Cost ($, Thousands) $320 $320 $320 $320 $320 $320 Total Cost ($, Thousands) thousand. Profit ($, Thousands) for its cable services, earning them a profit of Now suppose the Backwater County Public Utility Commission has the data and believes that cable subscription rates in the county are too expensive and that Gouge-em's profits are unfairly high. What regulated price will the Backwater County Public Utility Commission set so that Gouge-em makes only a normal rate of return on its investment? O O O O $5 $10 $15 $20
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started