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:

Democracy

In a democracy, citizens exercise a high degree of control over the state. They do this mainly by choosing representatives in regular, competitive elections.

Economic Development

The process of improving the economic, political, and social well-being of a community or country, often through industrial, technological, or infrastructural growth.

Modernization Theory

A theory that explains the process of transformation from a traditional, rural, agrarian society to a secular, urban, industrial society.

Transnational Corporations

Corporations operating in more than one country, beyond their home country's national boundaries.