A Computer Software Firm Has Developed a New and Better

question 2

Multiple Choice

A computer software firm has developed a new and better spreadsheet program. The program is protected by copyrights, so the firm can act as a monopolist for this product. The demand function for the spreadsheet is q = 50,000 - 100p. Any single consumer will want only one copy. The marginal cost of producing and distributing another copy and its documentation is just $10 per copy. If the company sells this software at the profit-maximizing monopoly price, the number of consumers who would not buy the software at the monopoly price but would be willing to pay at least the marginal cost is

• A) 50,000.
• B) 12,000.
• C) 14,000.
• D) 25,000.
• E) None of the above.

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Definitions:

Silence

The absence of sound or the choice to refrain from speaking or making noise.

Legal Recognition

The formal acknowledgment by a legal authority that validates the status, rights, or legitimacy of an entity, action, or agreement.

Unilateral Contract

A contract in which only one party makes an enforceable promise to do or refrain from doing something if the other party performs some act.

Binding Contract

An agreement between parties that is legally enforceable by law, containing all essential elements of a contract.