Describe what long run adjustment should anticipate

Reference no: EM13222838

You are manager of College Computers, a manufacture of customized computers that meet the specifications required by the local university. College computer is not the only firm that builds the computer to meet the university's specification. There are many other manufactures. To attach its student clientele, College Computers advertises its service by using "free service after the sale" policy to differentiate itself from the competitors.

a. Identify the market structure in the above example and explain.

b. Suppose the demand for the computers produced by College Computers is Q = 1000 - P. Its weekly cost of producing it is

C(Q) = 2000 + Q2.

If other firms in the industry sell PCs at $600, what price and quantity of computers should you choose?

c. Given the answer from part b, what long run adjustment should you anticipate? Explain.

Reference no: EM13222838

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