(Answered) Suppose microsoft chooses to produce 80 million copies of

Economics

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.

If Circuit City sold 2 million copies of Vista, it would earn _________ in revenue. If it sold 4 million copies of Vista, it would earn _______ in revenue.

A. $700 million; $1.2 billion

B. $800 million; $1.2 billion

C. $1.2 billion; $1.5 billion

D. $400 million; $800 million

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