Question #1 (4 points) You are a manager at Pacic Computer Inc. Recently your company decided to launch a server, called Pacicl, at a price of $2,000 (Assume that this price would not be changed). In the market, the existing and dominant server is HIMA, produced by Himalayas Inc. The price of HIMA is $1,700. Suppose that it is unlikely for Himalayas Inc. to change that price in any case. After conducting tests in the labs, you found that the performance of Pacic 1 is the same as that of H[MA for customers. That is perhaps why it has been difcult for your product to attract consumers away from Himalayas Inc. There are two types of customers in the market. Each year the total demand from Type 1 customers for Md the demand from Type 2 customers for HIMA servers is 400 as well. Assume that the total market demand would be xed even when servers perform better. Just now, some software developers in your division told you that they had developed one software, which would be compatible with Pacific 1 but not with HIMA. For Type 1 customers, Pacicl loaded with the software would perform twice faster. That is, a business customer could receive the same performance by buying one Pacicl loaded with the software as compared to bug g two HIMA servers. For Type 2 customers, Pacic I loaded with the software would perform four times faster than HIMA servers. For a typical business customer, in addition to costs purchasing servers, other costs (not dependent on whether a server is loaded with the new software) include electricity (about $500 per server each year for any server), licensing fees to get other applications (about $750 per server each year), and labor such as hiring server administrators (about $2000 per server each year). For simplicity, in your analysis, let's assume that each server is only used for one year. Also note that, before we have the new software, the two servers have the same performance. But the price of HIMA is lower. All customers purchased HIMA in the past. Given the above information, to maximize your profits, what is the highest possible price that you could charge for each license of the new software? Note that each license allows customers to install the software only on one server for one year. The variable cost for you to produce one copy of software is pretty low, so you can ignore such costs