Question
PC Connection and CDW are two online retailers that compete in an Internet market for digital cameras. While the products they sell are similar, the
PC Connection and CDW are two online retailers that compete in an Internet market for digital cameras. While the products they sell are similar, the firms attempt to differentiate themselves through their service policies. Over the last couple of months, PC Connection has matched CDW's price cuts, but has not matched its price increases. Suppose that when PC Connection matches CDW's price changes, the inverse demand curve for CDW's cameras is given byP= 1,000 - 2Q.When it does not match price changes, CDW's inverse demand curve isP= 700 -0.5Q.Based on this information, determine CDW's inverse demand function over the last couple of months.
P=?- ?QifQ 200
?- ? QifQ 200
Over what range will changes in marginal cost have no effect on CDW's profit-maximizing level of output?
$ to $
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