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Suppose you are designed a new computer and want to make sure it is optimal for your needs. Random Access Memory can be added to your computer at a cost of $100 per gigabyte. For you the benefit of the first gigabyte of RAM is $800, and the benefit decreases by 50 percent for each additional gigabyte (the second gigabyte has a value of $400, etc.).

Suppose your designing your computer, with the same benefits from additional RAM described in the proceeding problem. How much RAM do you desire if the price of RAM falls to $50? 2,4,5, or 50?and why?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9477347

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