Three companie are bidding to sell statistical software for an EconDepartment. Assume the software that each company is offering tosell is of equal quality.
Company A offers the software license for $260,000
Company B charges $2,000 per user
Company C charges a fixed cost of $80,000 for the first 60users and $1,000 for each additional user.
Assume Users (U) on x-axis and Costs (C) on the y-axis.
a.) Write out the cost equation for companies A, B. andC.
b.) On one graph, draw each of the cost functions forcompanies A, B, and C.
c.) What advice will you give the Econ when it comes to makinga decision on which company to purchase software from.
