(d) Now suppose that the firm's contract with the upstream retailer is coming to an end and they are considering whether to extend it or not. The retailer will purchase 1000 chairs per day at £50 per chair. If the firm does not extend their contract then they can sell their chairs locally and will face an inverse demand curve P(Q) = 500 - Q. Assume that r = 16 and w = 16/3. (i) What is the firm's profit function (Q) if they sell to the local market? π (ii) What is the firm's optimal output level if they sell to the local market? (iii) Is the firm better off selling to only the local market or extending the contract with the national retailer? (Note: Assume the firm can only sell to either the market or the retailer)

HP has developed a new, high-end, high-resolution printer, which can print 40 pages per minute. Its market research identified two target segments of customers: 3,500 large businesses and 6,500 university labs. A large business has a valuation of $900 for the new printer, whereas a university lab has a valuation of $630. HP’s variable cost for the printer is $450/unit; all fixed costs are sunk. Assume that each customer needs at most one new HP printer (i.e., no customer will buy multiple units). (a) Suppose that HP cannot price discriminate the two segments of customers, i.e., it can charge only one price for its printer. What is HP’s optimal price for the new printer? What is its maximum profit? (b) Suppose that HP can install an extra chip in the printer to slow down printing to 15 pages per minute. Such a chip costs HP $20 to make and install for each printer. The slower version of the printer is valued at $700 by a large business customer and $600 by a university lab. With…

R(x)= -0.956x^2 + 157x C(x)= 50.8x + 73.4 P(x)= R(x) - C(x) P(x)= -0.956x^2 + 106.2x - 73.4 What are the break-even points?  What is the profit at the break-even points? What number of widgets sold will yield positive profit? Determine the number of widgets that you should try to sell in order to maximize profit.  What is the maximum profit?

Consider a computer hardware production firm with total cost function TC = 2200+480Q+20Q2, and market demand function Qd = 190 – 2P; Q is output and P is market price.      (a) Determine the firm’s Total Cost when it produces 120 units of output.      (b) Determine the firm’s Marginal Cost when it produces 120 units of output.      (c) Determine the firm’s Average Cost when it produces 120 units of output.      (d) Find the market price of the firm’s output when it sells 120 units of output.      (e) Determine whether the firm makes profit, or loss, at 120 units of output.