Suppose that random access memory (RAM) can be added to your computer at a cost of $8 per gigabyte. Suppose also that the value to you, measured in terms of your willingness to pay, of an additional gigabyte of memory is $32 for the first gigabyte, and then falls by one-half for each additional gigabyte. Draw a graph of marginal cost and marginal benefit. How many gigabytes of memory should you purchase?
Answer to relevant QuestionsSuppose in Problem 11 the cost of RAM falls to $4 per gigabyte. How many gigabytes of memory should you purchase now? Suppose additionally that your benefit for an additional gigabyte of memory rises to $144 for the first ...You have just purchased a new Ford Taurus for $20,000, but the most you could get for it if you sold it privately is $15,000. Now you learn that Toyota is offering its Camry, which normally sells for $25,000, at a special ...The market for DVDs has supply and demand curves given by Ps = 2Qs and Pd = 42 - Qd, respectively.a. How many units will be traded at a price of $35? At a price of $14? Which participants will be dissatisfied at these ...How would the equilibrium price and quantity change in the market depicted below if the marginal cost of every producer were to increase by $2/lb?Repeat Problem 9, but instead suppose the buyer pays the tax, demand is P = 28 - Q, and supply is P = 20.
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