Business, 19.12.2019 00:31 jane078

In 2011, three firms (firm a, firm b, and firm c) were selling cellular phone service for a price of $40 per month in hershey, pennsylvania. each firm serviced 100 cellphone customers; thus, all firms together serviced a total of 300 customers. assume marginal cost is 0 (zero) for all firms and thus total revenue is equal to total profit. in 2012, firms a and b continued to service 100 customers, but firm c now serviced 150 customers; thus, all firms together serviced a total of 350 customers. all firms now charge $30 per month. due only to the price effect, profits for each firm decline by $1,000. due only to the output effect, profits for both firm a and firm b did not change, and profits for firm c increased by $1,500. it was in firm c’s interest to increase output

a. firm c realized only $1,000 of the total $3,000 price effect, but it realized the full $1,500 of the total quantity effect.
b. firm c realized only $2,500 of the total $3,000 price effect, but it realized the full $1,500 of the total quantity effect.
c. firm c realized only $2,250 of the total $3,000 price effect, but it realized the full $1,500 of the total quantity effect.
d. firm c realized only $1,750 of the total $3,000 price effect, but it realized the full $1,250 of the total quantity effect.
e. firm c realized only $2,000 of the total $3,000 price effect, but it realized the full $1,250 of the total quantity effect.

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In 2011, three firms (firm a, firm b, and firm c) were selling cellular phone service for a price of...

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