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Advanced Semiconductor Materials Lithography (ASML) is a monopolist in extreme ultraviolet (EUV) lithography systems used to produce computer chips. Its marginal cost of production c
Advanced Semiconductor Materials Lithography (ASML) is a monopolist in extreme ultraviolet (EUV) lithography systems used to produce computer chips. Its marginal cost of production c is 1 billion per unit. Small chip makers demand 4 units and are willing to pay 10 billion each, whereas large chip makers want to buy 6 units at a maximum 20 billion each. ASML also produces a UV system, a slower version of the EUV system, at a marginal cost c'=1.5. The two types of chip makers are willing to pay 12 and 8 billion for one UV system, respectively. What is the best pricing strategy for ASML? Group of answer choices a) Selling EUV units at 20 b) Selling UV units at 10 c) Selling EUV units at 12 and UV units at 8 d) Selling EUV units at 16 and UV units at 8
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