A Software Company That Sells Its Software Pre-Installed in Personal

question 42

Multiple Choice

A software company that sells its software pre-installed in personal computers is considering making its own computers instead of purchasing them from the Mega-Chip Company.To assemble their own computers could cost $1,000,000 in fixed costs and $100 per unit in variable costs.The company currently buys PCs for $1200,with no fixed costs.What is the break-even quantity?

• A) Greater than or equal to 1800
• B) Greater than 900 but fewer than 1800
• C) Greater than 450 but fewer than 900
• D) Less than 450

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Definitions:

Middle East

A transcontinental region in Afro-Eurasia spanning Western Asia and a part of North Africa, known for its historical, cultural, and political significance.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, symbolized as a percentage change.

Total Revenue Test

A method used to assess the elasticity of demand by observing changes in total revenue following a price change.

Quantity Supplied

The actual amount of a good or service producers are willing to sell at some specific price.