Question: Decrease in Cable Demand. Consider a cable TV company that has a fixed cost of $48 million and a marginal cost of $5 per subscriber.

Decrease in Cable Demand. Consider a cable TV company that has a fixed cost of $48 million and a marginal cost of $5 per subscriber. The company is regulated with an average-cost pricing policy.

a. The first two columns of the following table show three points on the initial demand curve. For example, at a price of $15 the quantity demanded is six million subscribers. For each $2 reduction in price, the number of subscribers increases by one million. Fill in the blanks in the following table. The regulated price is Price Subscribers (Millions) Average Cost $15 6 13 7 11 8 h. Suppose the demand for the product decreases, with the demand curve shifting to the left by one million subscribers. Fill in the blanks in the following table. The new regulated price is Price Subscribers (Milions] Average Cost $15 13 11

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