Three companies can supply a university with some mathematical software. Each company has a different pricing structure. Company 1 provides a site license which costs $130000 and can be used by anyone at the university. Company 2 Charges $1000 per user. Company 3 charges a fixed amount of $40000 for the first 60 users and $500 for each additional user. a. Draw a graph of each cost function on the same set of axes. b. What advice can you give the university about which company to use?

Three companies can supply a university with some mathematical software. Each company has a different pricing structure. Company 1 provides a site license which costs $130000 and can be used by anyone at the university. Company 2 Charges $1000 per user. Company 3 charges a fixed amount of $40000 for the first 60 users and $500 for each additional user. a. Draw a graph of each cost function on the same set of axes. b. What advice can you give the university about which company to use?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter22: Supply: The Costs Of Doing Business

Section: Chapter Questions

Problem 17E

See similar textbooks

Similar questions

What would happen to the following if there is anincrease in marginal cost? (a) The price that the monopolist can charge. (b) The quantity that the monopolist will produce. (c) The quantity that the perfectly competitive industry will produce. (d) The maximum profit of the perfectly competitive industry. .
Organizers of an Internet training session will charge participants $200 to attend. It costs $3000 to reserve the room, hire the instructor, bring in the equipment, and advertise. Assume it costs $25 per student for the organizers to provide the course materials.a.Write a math model for total cost.b.Write a math model for total revenue.c.Write a math model for total profit.d.Find the break-even point. And also I need the Excel solver solution and sensitivity report too .
There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through economies of scale government protection control of an important input . b. ABC’s market power does does not guarantee that the firm makes an economic profit.
How many shuts do you recommend selling per color per day? What then is your recommended dollar markup and markup percentage? What dollar margin and percentage margin is that?
Total Output 1 2 3 4 5 6 7 8 9 10 Price $ 100 90 80 70 60 50 40 30 20 10 Marginal Average Revenue $ 100 80 60 40 20 0 -20 -40 -60 -80 Total Cost $ 100.00 63.00 52.67 49.50 49.60 50.00 52.29 55.75 60.67 67.60 Marginal Cost $ 30 26 32 40 50 52 66 80 100 130 Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's total profit will be
Central Grocery in New Orleans is famous for its muffaletta, a large round sandwich filled with deli meats and topped with a tangy olive salad. Suppose the following table represents cost and revenue data for Central Grocery. Muffaletta Sold per Day Price (P) Total Revenue (TR) Marginal Revenue (MR) Total Cost (TC) Marginal Cost (MC) Average Total Cost (ATC) Profit 0 $15 $12 1 14 18 2 13 20 3 12 21 4 11 23 5 10 26 6 9 30 7 8 35 8 7 42 9 6 52 10 5 78 Fill in the table What are the profit-maximizing price and quantity, and what…
The Roadrunner farm, Wheeler’s one of competitors, reports that at their profit maximizing output, the price is below average variable cost. What would you advise?
Happy Go Lucky Electric Company is the only company providing electric power to the city of Go Lucky. The accompanying graph depicts their marginal costs (MC), total costs (ATC), demand (D), and marginal average t revenue (MR). Move point E to the firm's profit maximizing price and quantity. At the profit maximizing point, what is Happy Go Lucky level of profit? 0 $150 $90 -$30 Price and Costs ($/unit) 10 9 8 7 6 10 4 3 2 1 0 0 5 10 15 20 25 30 35 MR MC 0 ATC D 40 45 50
Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?
A bookstore sells 90 textbooks at a price of $70 a book. The average total cost is $50 per textbook. How much profit in dollars does the bookstore make?
Draw the cost-volume-profit diagram?
Give the advantages and disadvantages of outsourcing.