TV company has subscribers in area A and area B. The demand functions for each of these two groups are

Q(Area B) = 60 - 0.25(Area B)Q(Area A) = 100 - 0.50(Area A)

where Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given byC = 1000 + 40Q

Q1. What would be the marginal revenue in each market?

[1]MRAreaB = 240 - 8QAreaBandMRAreaA = 200 - 4QAreaA.

[2]MRAreaB = 60 - 40QAreaBandMRAreaA = 100 - 40QAreaA.

[3]MRAreaB = 1000 - 0.25QAreaBandMRAreaA = 1100 - 0.5QAreaA.

[4]None of the above is correct.

Q2. What is the firms marginal cost?

[1]R0

[2]R40

[3]R 60

[4]R100

Q3. What is the profit maximizing output (in thousands)?

[1]QAreaB = 25 and QAreaA = 40

[2]QAreaB = 40 and QAreaA= 60

[3]QAreaB =100 and QAreaA = 200

[4]QAreaB =250 and QAreaA = 200

Q4. What is the profit maximizing price?

[1]PAreaB= R140and PAreaA= R120

[2]PAreaB= R240and PAreaA= R200

[3]PAreaB= R300and PAreaA= R320

[4]PAreaB= R450and PAreaA= R550