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need quick answer QUESTION 2 (32 points) Consider a simplied version of the Windows PC market, where the demand for a Windows Computer (Q) is

need quick answer

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QUESTION 2 (32 points) Consider a simplied version of the Windows PC market, where the demand for a Windows Computer (Q) is given as a function of its price (PC): Q = 120219C Windows Computers are the nal good, produced in a perfectly competitive market. The production process needs two intermediate inputs - a copy of Microsoft Windows and a Processor. Thus, the price of a Computer (PC) as a function of the price of a copy of Microsoft Windows (PM) and the price of a Processor (PP) is given by PC=20+PM+PP Note that for markets to clear, an equilibrium condition is that the total quantity in each intermediate market must equal the total quantity in the computer market. Microsoft, 3. monopolist in the Windows Computers market, aims to maximize prots by the choice of PM. Since Microsoft simply sells a soware license, their marginal cost for a copy of Microso Windows is zero. Assume xed costs are ignored in Microsoft's decision. (1) Write down Microsoft's maximization problem. (2 points) (2) Derive the rst-order condition for prot-maximization. (2 points) Department of Economics 4 of 9 UC Irvine Econ 142A Industrial Organization Nilopa Shah FINAL EXAM WINTER 2022 (3) Calculate the optimal price P}; as a mction of PF. (I paint)

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