CBS is selling advertising for its broadcast of the AFC championship game. The station’s demand for minutes of commercial advertising time is the demand it faces from the companies to which it sells advertising time: PADS = 100,000 - 50Q. CBS has MC = $2000. Buyers pay CBS a price PCBS for each minute of advertising and add $1,000 for each ad to cover the tax they pay, so their MCADS= PCBS + 1000. No one has any fixed costs. The profit for CBS is (include dollar sign and any commas, no decimals)

CBS is selling advertising for its broadcast of the AFC championship game. The station’s demand for minutes of commercial advertising time is the demand it faces from the companies to which it sells advertising time: PADS = 100,000 - 50Q. CBS has MC = $2000. Buyers pay CBS a price PCBS for each minute of advertising and add $1,000 for each ad to cover the tax they pay, so their MCADS= PCBS + 1000. No one has any fixed costs. The profit for CBS is (include dollar sign and any commas, no decimals)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 2.4CE

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