The Following Table Shows the Relationship Between the Speed of a Computer's

question 6

Multiple Choice

The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation) , and only the CPU speeds listed below are available for purchase. $$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { CPU } \\\mathrm { GHz }\end{array} & \begin{array} { c } \text { Total } \\\text { Benefit }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Benefit }\end{array} & \begin{array} { c } \text { Total } \\\text { Cost }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost }\end{array} \\\hline 2.0 & \$ 1,000 & & \$ 900 & \\\hline 2.5 & \$ 1,400 & & & \$ 100 \\\hline 3.0 & & \$ 300 & \$ 1,200 & \\\hline 3.5 & \$ 1,900 & & \$ 1,500 & \\\hline 4.0 & \$ 2,000 & & & \$ 400 \\\hline\end{array}$$ The marginal benefit of upgrading from a 2.0GHz computer to a 2.5GHz computer is:

• A)$1,400.
• B)$1,000.
• C)$400.
• D)$100.

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Definitions:

Profit-Maximizing

The process or strategy employed by firms to determine the level of output and pricing that leads to the highest possible profits.

Market Price

Market price is the current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand dynamics.

Output

The total amount of goods or services produced by a company or industry, often measured over a specific period.

Minimum Price

A price floor set by the government, below which a product cannot be sold legally, aiming to ensure fair prices for producers.