Question: At Home Computers has determined that demand for their services is given by Q = 580 - 11P and a cost equation given by C

At Home Computers has determined that demand for their services is given by Q = 580 - 11P and a cost equation given by C = 425 + 1.2Q.

a. Determine the optimal price and quantity for the firm. (Price should be calculated to nearest cent. Example: $5.43 should not be rounded to $5.00.)

b. Suppose that costs change to C = 500 + 1.5Q. Determine the new optimal price and quantity. Explain why the results differ from those in part a.

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