Sal's satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions for each of these two groups are: QNY = 70 -0.25PNY QLA = 110-0.5PLA 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 C = 1000 + 40Q where Q = QNY +QLA a. What are the profit-maximizing prices and quantities for the New York and Los Angeles markets? (round all answers to two decimal places) In New York, the equilibrium quantity is subscribers at an equilibrium price of $ . While in Los Angeles, the equilibrium quantity is subscribers at an equilibrium price of $ b. As a consequence of a new satellite that the Pentagon recently deployed, people in Los Angeles receive Sal's New York broadcasts and people in New York receive Sal's Los Angeles broadcasts. As a result, anyone in New York or Los Angeles can receive Sal's broadcasts by subscribing in either city. Thus Sal can charge only a single price. What price should he charge, and what quantities will he sell in New York and Los Angeles? The equilibrium price would be $ and Sal would have subscribers in New York and subscribers in Los Angeles. c. In which of the above situations, (a) or (b), is Sal better off? In terms of consumer surplus, which situation do people in New York prefer and which do people in Los Angeles prefer? Why? O A. Sal prefers (a) because profit is higher with price discrimination. Since NY's demand is less elastic, it prefers (b) because its price is lower in (b) and consumer surplus is higher. And since LA's demand is more elastic, it prefers (a) because its price is lower in (a) and consumer surplus is higher. O B. Sal prefers (b) because profit is higher with a uniform price. Since NY's demand is less elastic, it prefers (b) because its price is lower in (b) and consumer surplus is higher. And since LA's demand is more elastic, it prefers (a) because its price is lower in (a) and consumer surplus is higher. O C. Sal prefers (a) because profit is higher with price discrimination. Since NY's demand is more elastic, it prefers (b) because its price is lower in (b) and consumer surplus is higher. And since LA's demand is less elastic, it prefers (a) because its price is lower in (a) and consumer surplus is higher. OD. Sal prefers (b) because profit is higher with a uniform price. Since NY's demand is more elastic, it prefers (b) because its price is lower in (b) and consumer surplus is higher. And since LA's demand is less elastic, it prefers (a) because its price is lower in (a) and consumer surplus is higher.