# 1.pdf - Problem 1 A computer products retailer purchases...

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Problem 1A computer products retailer purchases laser printers from a manufacturer at a price ofRs. 25,000 per printer. During the year, the retailer will try to sell the printers at a price greater thanRs. 25,000, but may not be able to sell all the printers. At the end of the year, the manufacturer willbuy back any unsold inventory at 40 percent of the original price. No one other than themanufacturer would be willing to buy these unsold printers at the end of the year.a. At the beginning of the year, before the retailer has purchased any printers, what is theopportunity cost of a laser printer?
b. After the retailer has purchased the laser printers, what is the opportunity cost associated withselling a laser printer to a customer? (Assume that if this customer does not buy the printer, it willbe unsold at the end of the year.)
c. Suppose that on December 1, the retailer still has a large inventory of unsold printers. The retailerhas set a retail price of Rs. 30,000 per printer. The manager of the store proposes that they shouldcut the price by half and sell the printers at Rs. 15,000 each. The owner of the store disagrees,pointing out that at Rs. 15,000 each, they would lose Rs. 10,000 on each printer sold. Is the owner’sargument correct?
Problem 2Consider the demand curve for the latest wearable fitness device, QD= 40,000 - 4P.a. Plot the demand curve90004000

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