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Suppose Microsoft chooses to produce 80 million copies of the software per year and sells copies of the software to retailers at $199 per copy.

Suppose Microsoft chooses to produce 80 million copies of the software per year and sells copies of the software to retailers at $199 per copy.

Now consider the problem of a retailer like Circuit City or Best Buy. Such retailers can sell as many copies of Vista they like at the prevailing market price of $200.

4.3. Compare the additional revenue Circuit City makes as it moves from 2 million to 4 million copies of Vista with the additional revenue it makes as it moves from 4 million to 6 million copies of Vista. If Circuit City wants to sell more copies, the additional revenue from each additional copy it sells:



A. Remains the same, because Circuit City sells all of its copies of Vista at the market price

B. Decreases, because Circuit City must lower its price to sell additional copies

C. Remains the same, because Circuit City must lower its price to sell additional copies

D. Decreases, because Circuit City sells all of its copies of Vista at the market price

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