You are the manager of College Computers, a manufacturer of
customized computers that meet the specifications required by the
local university. Over 90 percent of your clientele consists of
college students. College Computers is not the only firm that
builds computers to meet this university’s specifications; indeed,
it competes with many manufacturers online and through traditional
retail outlets. To attract its large student clientele, College
Computers runs a weekly ad in the student paper advertising its
“free service after the sale” policy in an attempt to differentiate
itself from the competition. The weekly demand for computers
produced by College Computers is given by Q =
1,400 − 5P, and its weekly cost of producing computers
is C(Q) = 1,600 +
2Q2.
If other firms in the industry sell PCs at $300, what quantity
and price of computers should you produce to maximize your firm’s
profits?
You are the manager of College Computers, a manufacturer of customized computers that meet the specifications required b
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