Question

b) You are considering two cable networks for your television. Tatasky charges
Rs. 120 per month regardless of the channels watched. Hathway on the other
hand charges Rs. 1/ channel per month. Your monthly channel demand is given
by the equation CD = 150 – 50P, where P is the price per channel.
(i) How many channels per month will you watch with each network?
(ii) Based on consumer surplus obtained, which provider should you choose

Answer 1

Given : Tatasky charges  Rs. 120 per month regardless of the channels watched.

Hathway on the other  hand charges Rs. 1/ channel per month. Your monthly channel demand is given  by the equation CD = 150 – 50P, where P is the price per channel.

To Find : (i) How many channels per month will you watch with each network?

(ii) Based on consumer surplus obtained, which provider should you choose

Solution:

Tatasky charges  Rs. 120 per month regardless of the channels watched.

Hathway on the other  hand charges Rs. 1/ channel per month.

CD = 150 – 50P

P = Rs 1

=> CD = 150 - 50

=> CD = 100

Hence 100 Channel Watched

100 channels per month will be Watched per month

So Charges = 100 x 1 = 100  Rs for Hathway

Tatasky charges  Rs. 120 per month  

Hence Hathway is better option

Learn More:

Demand (units) 1011121314Probability0.100.100.250.400.15The ...

https://brainly.in/question/21083748

Two points on a linear demand function are (2080000) and ...

https://brainly.in/question/20959747