box and PlayStation are incompatible videogame platforms because users of one console cannot play games sold for the other console. If an adapter appears in the market which renders both consoles compatible:

Question

Answer

If the price of the adapter is above the price of the consoles, it will increase consumer’s switching costs and therefore increase the intensity of competition among videogame platforms.

Answer

If the price of the adapter is below the price of the consoles, it will reduce consumer’s switching costs and therefore reduce the intensity of competition among videogame platforms.

Answer

If the price of the adapter is below the price of the consoles, it will reduce consumer’s switching costs and therefore increase the intensity of competition among videogame platforms.

Answer

If the price of the adapter is above the price of the consoles, it will increase consumer’s switching costs and therefore reduce the intensity of competition among videogame platforms.

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box and PlayStation are incompatible videogame platforms because users of one co...

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