Question
Quasar Corporation is set to release its latest video game system which utilizes the newest game technology.In fact, the release date is sooner than that
Quasar Corporation is set to release its latest video game system which utilizes the newest game technology.In fact, the release date is sooner than that of its only rival Orion.This gives Quasar Corporation "first-move" ability.The demand for video game systems is Qd = 150 - 0.1P. Marginal cost is constant at MC = 100.
a. Determine Orion's marginal revenue curve.(Hint: you need to solve the demand curve for P first)
b. What price and output would Quasar choose as a monopolist?c.Determine Orion's and Quasar's reaction functions in a Cournot duopoly.
d. What are output, prices and profits do the above duopolists earn?
e. Now assume Quasar has the first mover advantage. Work out the Stackelberg outcomes: output for the Stackelberg leader and the follower, price, and profits.
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