Suppose You Manufacture 10 Million Hard Drives Per Year Specifically

question 29

Short Answer

Suppose you manufacture 10 million hard drives per year specifically for Dell laptop computers.Suppose your average variable cost C=$20/unit,annualized cost of investment to build a hard drive factory I=$30 million,and the market price (bailout market price in the event Dell does not buy)Pm=$22/unit.If Dell agrees to purchase the 10 million hard drives at a price P*=$25/unit and subsequently renegotiates to only purchase for $22.50/unit,what has Dell increased its own profits by?

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Definitions:

Drainage

The removal of fluids from a body part, typically through natural or artificial means, to prevent or alleviate swelling, infection, or other complications.

Staples

Metal clips used in surgical procedures to close wounds or incisions, as well as in office settings to secure documents together.

Nonblanchable Hyperemia

A redness of the skin that does not lighten or pale when pressed, indicating potential tissue damage.

Reactive Hyperemia

An increase in blood flow to an area of the body after blood supply has been temporarily blocked, leading to redness and warmth.