Three firms have applied for the franchise to operate the cable TV system during the coming year.
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Question:
Three firms have applied for the franchise to operate the cable TV system during the coming year. The annual cost of operating the system is $250 and the demand curve for its serving is = 500 , where is the price per subscriber per year and is the expected number of subscribers. The franchise is assigned for only one year, and it allows the firm with the franchise to charge whatever price it chooses. The government will choose the applicant that spends the most money lobbying the government members. If the applicants cannot collude, how much will each spend on lobbying
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