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Consider the cost function
C(Q) = 400 + 50Q + 5Q2
for RussCo to produce its new Game System. Using that cost function for the Game System, determine the profit-maximizing output and price for the RussCo Game System, and discuss its long-run implications, under three alternative scenarios:
A) RussCo Game System is a perfect substitute with a similar product offered by Sony, Nintendo and several other Game Systems that have similar cost functions and that currently sell for $200 each
B) RussCo Game System has no substitutes and so is a monopolist, and the demand for the RussCo Game System is expected to forever be Q = 30 – (1/5)P – note you use the earlier listed cost function
C) RussCo Game System currently has no substitutes, and currently the demand for the RussCo Game System is Q = 80 – (1/5)P, but RussCo anticipates other firms can develop close substitutes in the future. – note you use the earlier listed cost function
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