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2. Your company has a lot of capital and buys out the rival company (from question 1). Your company now has a monopoly over the
2. Your company has a lot of capital and buys out the rival company (from question 1). Your company now has a monopoly over the software. De- mand is now: Q = 18, 000 - 2.5P and your marginal cost is still C = 10. a. What is the new price your company charges, and how much is pro- duced? b. How much profit does your company make? Compare the outcome from the duopoly case.c. There is a foreign car manufacturer that wants to sell cars in your country, but it needs to buy your software to be competitive. The demand for your product from the foreign company is: Q' = 10,000 - 3P What price do you charge, and how many systems do you install for the foreign car company? d. Draw the equilibrium quantity and price for each market. Label prices and quantities. c. If the foreign car company buys the domestic car company, how would your asking price(s) change? No need to solve mathematically, just explain
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