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Doorway Computers Manufactures PCs,and Also Produces the Special DVD Drives

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Essay

Doorway Computers manufactures PCs,and also produces the special DVD drives that go into each PC.Demand for computers is estimated to be: P = 2,000 - 0.1Q,where Q denotes units sold per month,and P is the price of the PC.The firm's total cost is C = 40,000 + 800Q + CD,where CD denotes the firm's total cost of producing drives.Currently,CD = 100QD,that is,the firm's cost per drive is $100.
(a)If there is no external market for DVD drives,how many computers should Doorway produce and sell in order to maximize profit? What transfer price should the firm set for disk drives?


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