The information in the table below shows 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 $200,000 (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.

Quantity Price (per year)
0 $180
3,000 $150
6,000 $120
9,000 $ 90
12,000 $ 60
15,000 $ 30
18,000 $ 0

If there is only one digital cable TV company in this market, what price would it charge for a premium digital channel subscription to maximize its profit?
a. $30
b. $90
c. $60
d. $150
 

Answer rating: 100% (QA)

Sol un From the given data We have fixed Cost 200000 Quantity P... View the full answer