Question
The producer of a downloadable antivirus software program spends exactly $3,150,000 producing the first copy and incurring various costs required to make the software user-friendly.
The producer of a downloadable antivirus software program spends exactly $3,150,000 producing the first copy and incurring various costs required to make the software "user-friendly." The firm can produce and distribute additional copies at a per-unit cost of$1.00. If the company sold as many copies as consumers wished to purchase at a price of $1.00 per copy, it would sell 450,000 copies. If the company maximizes its economic profits in theshort-run, it sells 250,000 copies at a price of $40. Finally, the company earns zero economic profits when it sells 300,000 copies.
What are the firm's economic profits (or losses) if it sells 450,000 copies of the antivirus software program at a $1.00 price per copy?
What are the maximum economic profits that the firm can earn in the short run?
What is marginal revenue when the firm maximizes its short-run economic profits?
In the long run, after entry of competing firms, to the nearest dollar, and including the correct sign, what amount of economic profits will this firm earn?
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