In which situation is Sal better off? In terms of consumers’ surplus which situation do people in LA prefer and which do people in NY prefer? Why?
ASSIGNMENT Problem 1. 6.8 from Cabral: Sal’s satellite company broadcasts TV to subscribers in LA and NY. Demand functions are QNY=50-(1/3)PNY QLA=80-(2/3)PLA where Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by TC=1000+30Q, where Q= QNY + […]