Find the minimum probability of success

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Reference no: EM132154258

Question: Suppose a firm with market power faces inverse market demand p = 100 -2Q. The firm has a constant marginal cost of $20 and fixed cost of $400. Suppose the firm is contemplating investing $500 in a technology that will help identify each consumer's willingness to pay and prevent resale of their products, and as a result the firm can perfectly price discriminate. Find the minimum probability of success that will convince the firm to make the R&D investment.

Reference no: EM132154258

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