Question
You are an executive for SuperComputer, Inc.(SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the
You are an executive for SuperComputer, Inc.(SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. SC has two types of potential customers of equal number10 businesses and 10 academic institutions.
Each business customer has the demandfunction:
Q=15P,
where Q is in millions of seconds permonth; each academic institution has thedemand:
Q=12P.
The marginal cost to SC of additional computing is 2 cents persecond, regardless of volume.
a. Suppose that you could separate business and academic customers. What rental fee and usage fee would you charge eachgroup? What would be yourprofits?(Round all answers to the nearestinteger)
For businessusers, the rental fee would be $
nothing
per month and the usage fee is
nothing
cents per second.
For academicinstitutions, the rental fee would be $
nothing
per month and the usage fee is
nothing
cents per second.
SC's total profits are $
nothing
per month.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started