Solution-What range will changes in marginal cost have no

What range will changes in marginal cost have no effect

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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 by P = 1,500 - 3Q. When it does not match price changes, CDW's inverse demand curve is P = 1,200 -0.5Q.

Question 1: Based on this information, determine CDW's inverse demand function over the last couple of months.

P = - Q if Q ≤ 120

- Q if Q ≥ 120

Question 2: Over what range will changes in marginal cost have no effect on CDW's profit-maximizing level of output?

Reference no: EM132591168

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What range will changes in marginal cost have no effect

Reference no: EM132591168

Reference no: EM132591168

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