Question: Use the information in Solved Problem 15.3 to answer the following questions. a. What will Comcast do if the tax is $36.00 per month instead

Use the information in Solved Problem 15.3 to answer the following questions.
a. What will Comcast do if the tax is $36.00 per month instead of $25.00? (Hint: Will its decision be different in the long run than in the short run?)
b. Suppose that the flat per-month tax is replaced with a tax on the firm of $25.00 per cable subscriber. Now how many subscriptions should Comcast sell if it wants to maximize profit? What price should it charge? What is its profit? (Assume that Comcast will sell only the quantities listed in the table.)
Information from Solved Problem 15.3

Marginal Revenue ΔTR ΔΟ Marginal Cost ΔTR ΔΟ (MR = Total (MC = Quantity Price Revenue Total Cost $27 $56 26 4 73 2

Marginal Revenue TR Marginal Cost TR (MR = Total (MC = Quantity Price Revenue Total Cost $27 $56 26 4 73 25 91 24 6. 110 23 130 22 8. 151 3.

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