Use data given picture.

Q1) Analyze the approach from ForceSales from the theoretical angle of externalities:

a. Why is ForceSales interested in integrating the chat bot system? Explain by

applying the economic concept of externalities?

b. Use a numeric example of net benefits that showcases the effect of

externalities in this situation.

c. Suggest two ways to internalize the externalities for the two firms and explain

why you choose these internalization mechanisms over other mechanisms.

Q2) Explain the implications of the chat bot system on the production function for the

customer support of clients by:

a. Proposing and explaining how the production function for customer support

could look like after introducing the chat bot system, assuming that Angela's

claim for improvement is correct.

b. Explain the implications of these changes for the concept of diminishing

returns and returns to scale.

c. Assume that the client has the production function as described above:

Q= 24?k?l

The price for labor is 2?/unit and the price for capital is 2?/unit (P_L = 2 & P_K

= 2). The firm wants to produce 600 units of output (Q = 600).

What quantities of capital and labour should the firm employ if its goal is to

produce 600 units of output at minimum costs? How much does it cost, in the

cost minimum, to produce 600 units of output?

Being a Tech Entrggreueur After completing her studies, Angela was at cross-roads in her career. {In the one hand, she had great job offers from large established rms, offering a lot of security and a good salary. [in the other hand, Angela knew that she preferred working for her own cause instead of being one of many employees. She felt limited by the corporate culture and the typical 9 to 5 attitude that was predominantly implemented in the companies that wanted to hire her. Instead of choosing the secure option, Angela decided to start her own rm. Together with two fellow students from her studies, she founded a company that provides a chat bot solution for business customers called Babbfsouo. Angela has been leading the rm as co-founder for the last 3 years during which the rm has been performing well. The chat bot solution provided by Babhfeotjo is implemented on clients' websites and allows these clients to automatically answer consumers" questions at any time of the day. The technological foundation of the chat hot is a combination of a library of standardized answers to a large set of common questions, as well as articial intelligence and machine learning algorithms that help the system to correctly interpret consumers' questions and become smarter over time. If the chat bot is not able to answer a question of a consumer using information from the library, the inquiry is either directly forwarded to a sales representative {during ofce hours} or the chat bot offers the consumer the opportunity to leave contact details, for example e-l'vlail address or phone number, to be contacted later. Lately, the Babbleotjo team has been working on a performance update to the chat bot. The team wants to add a cloud processing layer that processes the sub mitted questions of consuan more efciently. For this purpose, the team needs to allocate random accms memory {RAM} to two sub-processes: {1} processing speed of single messages, and {2] parallel processing of several requests at the same time. Babbleotio has already purchased a new server rack for 30,000 DKK and S IZGE RAM in units oleZG-E for 1,000 DKK per piece and 32,001] DKK in total