# ps__11 - Problem Set#11 Ec 201 Michigan State University L...

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Problem Set #11 Ec 201 L. Martin Michigan State University Spring, 2009 1. Cutthroat Cable is the only supplier of cable programming to Southpointe. The marginal cost of hooking up another household is \$20 and the demand for hookups is given below. Fixed costs, which include the programming costs and the equipment equal \$10,000. Price Quantity Total Marginal Total Average Revenue Revenue Cost Cost \$80 100 \$70 200 \$60 300 \$50 400 \$40 500 \$30 600 \$20 700 a. Find the profit maximizing price and quantity. Price _________ Quantity _________ b. Find the efficient price and quantity. Price _________ Quantity _________ c. Compute total and average cost and enter in the table. d. Find the price and quantity that would just allow the cable firm to make a normal return. Price _________ Quantity _________ e. Draw a diagram illustrating your answer.

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2. Dr. Moneybags and Dr. Rich both sell a new procedure for wrinkle relaxation. The demand is given below. The marginal cost is \$100 per patient. Price
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ps__11 - Problem Set#11 Ec 201 Michigan State University L...

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