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 CDWs price cuts, but has not matched its price increases. Suppose that when PC Connection matches CDWs price changes, the inverse demand curve for CDWs cameras is given by P = 1,400 - 2Q. When it does not match price changes, CDWs inverse demand curve is P = 1,00 -0.5Q. Based on this information, determine CDWs inverse demand function over the last couple of months. P = ___ - ____ Q if Q 200
____ - ____ Q if Q 200
Over what range will changes in marginal cost have no effect on CDWs profit-maximizing level of output?
$____ to $_____
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