Question
In the video game WarFrame, Platinum is a currency players use to buy and sell in-game items. This Platinum can be purchased for real U.S.
In the video game WarFrame, Platinum is a currency players use to buy and sell in-game items. This Platinum can be purchased for real U.S. dollars from the game's website. Suppose the daily market demand for Platinum is P = 70 - 0.0005Q and the marginal cost of Platinum is 0.0002Q. Where P is in cents.
A) In a competitive market, how much Platinum would gamers purchase each day?
B) Digital Extremes Ltd. owns Warframe and is the only licensed seller of Platinum in the market. Assuming they exercise their monopoly power, how much will gamers pay for each unit of Platinum they purchase?
C) Suppose gamers become annoyed with Digital Extremes and the outrageous sums they are charging for pretend money. They lobby Congress for regulation. Under a marginal cost price ceiling, how many units of Platinum will now be purchased?
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