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Suppose that Microsoft is the only producer of operating systems and Netscape is the only producer of Web browsers. Suppose also that nobody wants an operating system without a Web browser and nobody wants a Web browser without an operating system. Suppose that both firms produce at zero marginal cost and that the demand for a packageconsisting of an operating system and a browser is given by Q = 100 - P.

Suppose that Microsoft and Netscape take each other's prices as given (simultaneous pricing). What is the price of an operating system? What is the price of a browser?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9489406

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