Suppose you are the head of a company called PC-Plugg that specializes in delivering computers to students at LTU. Over 90 percent of the customers consist of students at the university. However, PC-Plugg is not the only company that sells computers to students, as it competes with many other retailers that sell computers (both in stores and on the internet). To attract students, PC-Plugg has a store adjacent to the university, and they offer free service to students at LTU. PC-plugs' demand for computers per year is given by Q = 8,000-2, and the cost for the company is TC (Q) = 1,000,000 + 2Q2 per year.

Answer the following questions: a) What market structure prevails in the market? Justify your answer

b) What price and quantity should PC-plug decide on to maximize its profit?

c) What long-term changes can the company expect given the answer to question b)?

Suppose you are the head of a company called PC-Plugg that specializes in delivering computers to students at LTU. Over 90 percent of the customers consist of students at the university. However, PC-Plugg is not the only company that sells computers to students, as it competes with many other retailers that sell computers (both in stores and on the internet). To attract students, PC-Plugg has a store adjacent to the university, and they offer free service to students at LTU. PC-plugs' demand for computers per year is given by Q = 8,000-2, and the cost for the company is TC (Q) = 1,000,000 + 2Q2 per year.

Answer the following questions: a) What market structure prevails in the market? Justify your answer

b) What price and quantity should PC-plug decide on to maximize its profit?

c) What long-term changes can the company expect given the answer to question b)?