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Question 2 _ _ Suppose your company manufactures 4,000 hard drives per year specically for Apple laptop computers. Suppose your company's average variable cost is
Question 2 _ _ Suppose your company manufactures 4,000 hard drives per year specically for Apple laptop computers. Suppose your company's average variable cost is $4 per unit, the annualised cost of investment to build a hard drive factory is $10,000, and market price (market price in the event Apple does not buy) is $6 per unit. Based on the above information, answer the following questions. (a) How much is your company's relationship specic investment? (b) How much is your company's rent if Apple agrees to purchase the 2,000 hard drives at $8 per unit? (c) How much is your company's quasi-rent if the deal your company had with Apple in part (b) falls apart
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