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 regular price is?
Price is $15, $13, and $11.
Subscribers is 6, 7, and 8.
What is the average cost?