This same manufacturer of electronics products has just developed a handheld computer. Following is the cost schedule for producing these computers on a monthly basis. Also included is a schedule of prices and quantities that the firm believes it will be able to sell (based on previous market research).

a. What price should the firm charge if it wants to maximize its profits in the short run?
b. What arguments can be made for charging a price higher than this price? If a higher price is indeed established, what amount would you recommend? Explain.
c. What arguments can be made for charging a lower price than the profit-maximizing level? If a lower price is indeed established, what amount would you recommend? Explain.

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Q (Thousands) AVC AC Price $1,650 1,570 1,490 1,410 1,330 1,250 1,170 1,090 1010 930 850 MC $1,570 $1,281 S2.281 $1,281 987 759 597 501 471 507 609 1 1,410 1,250 1,090 930 770 610 450 290 1,134 ,634 1,009 342.33 906 1,156 825 025 766 729 932.67 871.86 889 832.11 850 721 750 10 1,011