Smework: Government and Product Markets: Antitrust and Regulation (Ch 25)
PRICE (Dollars per subscription)
88888
70
90
100
20
10
°
ATC
MC
MR
6 8 10
12
14
16
18
20
QUANTITY (Thousands of subscriptions)
Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints.
Complete the first row of the following table.
Short Run
Pricing Mechanism
Profit Maximization
Quantity
(Subscriptions)
6,000
Price
(Dollars per subscription)
Profit
Long-Run Decision
Marginal-Cost Pricing
6,000
Average-Cost Pricing
444

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