Omega is a communications software firm, providing interface software between input suppliers and downstream auto companies over two periods. Suppose MC=0 and FC=$4m in each period.

Demand for the software is normally P=3000 - 0.2q in each of two periods.

However, significant network effects exist for this software, so if Omega sells 12,000 units or more in the first period, then demand in the second period increases to P=4000 - 0.2q.

Calculate the total profit over both periods when selling 12,000 units in period 1 and then the profit-maximizing quantity in period 2 given the greater demand.

Does Omega earn greater profit using this strategy compared to selling less and choosing the profit-maximizing price in period 1? Show and explain