Suppose that Comcast has a cable
monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable.
Suppose the local government imposes a $98 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $60.)
Suppose that the flat per-month tax is replaced with a tax on the firm of $4 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table).
To maximize profit, Comcast will sell ___ subscriptions
and charge a price of $_
for profits of $_____
Comcast should produce 6 units in the short run and shut down in the long run.
5
60
76 (total revenue of
minus TR
minus MR
tax paid on 55
subscriptions.)

According to Irving Fisher, a monopoly is a market where there is "no competition," making a singular individual or company the only supplier of a specific good or service.

When there is just one seller in the market, it is called a monopoly. The monopoly case is typically viewed as the complete antithesis of perfect competition in economic research.

A company that sells its product exclusively and without any close substitutes is said to have a monopoly. An unchecked monopoly has the ability to set prices and has market power.

Examples include Microsoft and Windows, DeBeers and diamonds, and the natural gas provider in your community.

Therefore, the correct answer is a) Comcast should produce 6 units in the short run and shut down in the long run.

The complete question is:

Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small.)

Price Quantity Total Revenue Marginal Revenue Total Cost Marginal Cost

68 3 204 - 144 -

64 4 256 52 172 28

60 5 300 44 204 32

56 6 336 36 240 36

52 7 364 28 280 40

48 8 384 20 324 44

Suppose the local government imposes a $99 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal to $60.)

A. Comcast should produce 6 units in the short run and shut down in the long run.

B. Comcast should produce 6 units in the short run and in the long run.

C. Comcast should shut down in the short run and in the long run.

D. Comcast should shut down in the short run and produce 6 units in the long run.

E. None of the above.

Suppose that the flat per-month tax is replaced with a tax on the firm of $4 per cable subscriber. (Assume that Comcast will sell only the quantities listed in the table.) To maximize profit, how many subscriptions should Comcast sell, and at what price? What will be the profit?

To learn more about monopoly, refer to:

https://brainly.com/question/13113415

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