Problem
After you have studied Economics in the News on pp. 334 - 335, answer the following questions.
a. Why do you think Babolat worked with the firm that helped Nintendo develop the Wii remote?
b. How would Babolat's cost curves ( MC and ATC ) have been different if they had not worked with the Wii developer?
c. How do you think the launch of Babolat's new-technology racquet has influenced the demand for other firm's racquets?
d. Draw a graph to illustrate your answer to part (c). Explain your answer.
e. Explain the effects of the introduction of the new-technology racquet on Prince and other firms in the market for tennis racquets. In particular, explain what will happen to the markup and excess capacity in the market for smart racquets.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.