What range will changes in marginal cost have effect on cdws

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Reference no: EM13231863

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 CDW's price increases. Suppose that when PC Connection matches CDW's price changes, the inverse demand curve for CDW's cameras is given by P=1250-2Q. When it does not match price increases, CDW's inverse curve is P=800-0.5Q. Based on this information, determine CDW's inverse demand and marginal revenue functions over the last couple of months. Over what range will changes in marginal cost have no effect on CDW's profit-maximizing level of output?

Reference no: EM13231863

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