The Nintari Company produces video-game-playing machines and a second firm, Necsega, owns exclusive rights to manufacture games that can be used with the Nintari game machine. Both of these imperfectly competitive firms are maximizing profits. If Nintari buys Necsega and nothing else changes, then profits will be maximized if Nintari
A) decreases the prices of game machines and games.
B) does not change the prices of game machines or games.
C) increases the prices of game machines and games.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

By decreasing the prices of game machines and games, Nintari can increase the quantity sold, potentially increasing overall profits due to the complementary nature of the products.

The Nintari Company Produces Video-Game-Playing Machines and a Second Firm