Three companie are bidding to sell statistical software for an Econ Department. Assume the software that...

90.2K

Verified Solution

Question

Economics

Three companie are bidding to sell statistical software for an EconDepartment. Assume the software that each company is offering tosell is of equal quality.

Company A offers the software license for $260,000
Company B charges $2,000 per user
Company C charges a fixed cost of $80,000 for the first 60users and $1,000 for each additional user.

Assume Users (U) on x-axis and Costs (C) on the y-axis.

a.) Write out the cost equation for companies A, B. andC.

b.) On one graph, draw each of the cost functions forcompanies A, B, and C.

c.) What advice will you give the Econ when it comes to makinga decision on which company to purchase software from.

Answer & Explanation Solved by verified expert

3.9 Ratings (565 Votes)

aCompany A offers the license for a fixed cost of 260000 Thecost function for A is C 260000Company B offers the license for a variable cost of 2000 peruser The cost function for B is C See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member