In: Economics
The renown experimental filmmaker James Incandenza has finally found a cure for boredom. His creation is known as the “The Entertainment.” Demand for The Entertainment in the United States is Qu = 100-P. Demand for The Entertainment in Canada is Qc = α100-P. The total cost of producing The Entertainment is C(Q) = 20Q. James Incandenza must decide whether to only sell The Entertainment in the United States or to sell it in both the United States and Canada. If James must charge the same price in both countries, what is smallest value of ↵ such that James will sell in both countries?