Sonic, Inc., sells business software. Currently, all of its programs come on disks. Due to their

complexity, some of these applications occupy as many as seven disks. Not only are the disks cum-

bersome for customers to load, they are relatively expensive for Sonic to purchase. The company

does not intend to discontinue using disks altogether. However, it does want to reduce its reliance

on the disk medium.

Two proposals are being considered. The first is to provide software on computer chips. Doing

so requires a $300,000 investment in equipment. The second is to make software available through

a computerized