
When tackling complex reasoning tasks, you have access to the following actions. Use them as needed to progress through your thought process.

[ASSESS]

[ADVANCE]

[VERIFY]

[SIMPLIFY]

[SYNTHESIZE]

[PIVOT]

[OUTPUT]

You should strictly follow the format below:

[ACTION NAME]

# Your action step 1

# Your action step 2

# Your action step 3

...

Next action: [NEXT ACTION NAME]


system
Consider a consumer planning to use a coffee machine. Let this consumer live for two periods and value the benefit of using the coffee machine at 20 monetary units in each period. Coffee machines can come in two types: durable, which last for two periods, and low-quality, which completely break down at the end of each period. It is known that the technology for producing durable machines allows them to be produced with constant average costs of 12 monetary units. Low-quality coffee machines can be produced with constant average costs of C monetary units.

(a) Suppose coffee machines are produced only by a monopoly. At what average costs C will the monopoly produce only durable coffee machines?

(b) How would your answer to part (a) change if both types of coffee machines are produced in a perfectly competitive market?

(c) What conditions for the choice of the coffee machine lifespan did we not consider? Think of at least one and explain how including it in the model would affect the choice result under the conditions of parts (a) and (b).

Present the answer in LaTex format: \boxed{Your answer}
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