Question
Consider Dell laptops. (a) (3 pts) With respect to Dell's laptop production, list i) one fixed cost, ii) one variable cost, and iii) one implicit
Consider Dell laptops.
(a) (3 pts) With respect to Dell's laptop production, list i) one fixed cost, ii) one variable cost, and iii) one implicit opportunity cost (either fixed or variable). Explain your answers.
(b) (2 pts) Dell tells Intel (a producer of computer processing chips) that Intel's costs are too high and that Dell wants a discount because Dell buys so many chips. What antitrust concerns could arise here?
(c) (2 pts) Dell is currently producing quantity Q = 5, 000 units with total costs TC = 100, 000+20Q. Do they have economies or diseconomies of scale? Explain your answer.
(d) (2 pts) Would you consider the demand for Dell laptops to be relatively price elastic or inelastic? Give at least two concrete reasons and explain.
(e) (4 pts) What are ways that Dell engages (or could engage) in price discrimination with its laptops? Give at least two concrete examples and explain.
(f) (2 pts) Assume that Dell is considering an acquisition of HP. What antitrust concerns could arise here?
(g) (3 pts) Assume that Dell succeeds at acquiring HP. What should happen to the price of Dell laptops and HP laptops? Would one of the prices change more than the other? Explain your answers.
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