Question: College Computer sells personal computers, software, and printers. The relevant information is summarized below. Suppose initially that the firm sells 1000 computers. Unit Price $1,500

College Computer sells personal computers, software, and printers. The relevant information

is summarized below. Suppose initially that the firm sells 1000 computers. Unit

College Computer sells personal computers, software, and printers. The relevant information is summarized below. Suppose initially that the firm sells 1000 computers. Unit Price $1,500 175 1,450 Personal computer Software program Printer Unit Dollar Contribution Margin: $500 75 500 Unit Variable Cost $1,000 100 950 a) The firm is considering a price increase of 10% on computers. What is its break-even quantity if there are no complementarities with software and printer sales? Show all work. b) What is its break-even quantity if, on average, every new computer sold generates addi- tional sales of two software packages and one printer (assume these complementarity rela- tionships hold over the entire range of computer price points and sales)? Show all work. College Computer sells personal computers, software, and printers. The relevant information is summarized below. Suppose initially that the firm sells 1000 computers. Unit Price $1,500 175 1,450 Personal computer Software program Printer Unit Dollar Contribution Margin: $500 75 500 Unit Variable Cost $1,000 100 950 a) The firm is considering a price increase of 10% on computers. What is its break-even quantity if there are no complementarities with software and printer sales? Show all work. b) What is its break-even quantity if, on average, every new computer sold generates addi- tional sales of two software packages and one printer (assume these complementarity rela- tionships hold over the entire range of computer price points and sales)? Show all work

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