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Consider a market with the following demand function: D=60-X*P where D is total demand, P is price, X is a positive constant. Your competitor has

Consider a market with the following demand function: D=60-X*P where D is total demand, P is price, X is a positive constant. Your competitor has a constant marginal cost of 3 and a price of 6. You have a constant marginal cost of 1. You can either play a margin strategy, charging a price of 6 and capturing half of the demand, or play a share strategy, charging a price of 3 and capturing the entire market. Discuss the conditions on the parameter X that make the margin or the share strategy more compelling. HINT: Find the value of the parameter X that makes you indifferent between following either strategy.

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