Question

Score:0012 pis Instructor Assignable 1 Question Hep B Click on the icon to read the news clip, then answer the follawing Price (dollars per copy questions The graph shows the market for Microsoft Windows > The graph will plot data needed to answer this question. If the marginal cost of making a copy of the full version of Windows that includes Intened Explorer (IE) is zero, Microsoft will set the price of Windows at S 400 per copy If the average fixed cost of stripping IE from Windows is 380 per copy Microsoft wil set the price of Windows stripped of IE at sEll per copy IR Quantity thousands of copies of Windows per month fal >>> Click on the grapb to work out the answer

Answer 1

When marginal cost=0 then marginal revenue has to be zero in order to maximise profit. Thus price=400 and quantity=50thousand

even when average fixed cost is $80 then also Microsoft will sell at $400 because price and output decision doesn't depend on AFC.

Thus price=$400