Softco is a software company that sells a patented computer program to businesses. Each business it serves has the demand for Softco's product: P = 90 – Q The marginal cost for each program is $30. Assuming that there are no fixed costs, answer the following questions: If Softco sells its program at a uniform price, what price would maximize profit? How many units would it sell to each business customer? How much profit would it earn from each business customer? Suppose that Softco were to sell the first block at the price you determined in part (a), and that the quantity for that block is the quantity you determined in part (a). Find the profit-maximizing quantity and price per unit for the second block. How much extra profit would Softco earn from each of its business customers? Do you think Softco could earn even more profits with a set of prices and quantities for the two blocks different from those in part (b)?

Softco is a software company that sells a patented computer program to businesses. Each business it serves has the demand for Softco's product: P = 90 – Q The marginal cost for each program is $30. Assuming that there are no fixed costs, answer the following questions: If Softco sells its program at a uniform price, what price would maximize profit? How many units would it sell to each business customer? How much profit would it earn from each business customer? Suppose that Softco were to sell the first block at the price you determined in part (a), and that the quantity for that block is the quantity you determined in part (a). Find the profit-maximizing quantity and price per unit for the second block. How much extra profit would Softco earn from each of its business customers? Do you think Softco could earn even more profits with a set of prices and quantities for the two blocks different from those in part (b)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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