Operating System Prices In The Home Pc Market
Because the demand for OS is a derived demand revealed through the demand for PCs and because its elasticity is relatively small, the profit-maximizing price of DOS/WIN that would result from a static equilibrium is much higher than the observed price. We investigate this assertion empirically by fitting a differentiated-products model of the home PC market to panel data of all PC brands sold in the G7 countries over the period 1995-1999. The results confirm that the low value of the aggregate elasticity of demand for PCs is the result of differentiation and substitution among PCs. Copyright Blackwell Publishing Ltd. 2005.
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Volume (Year): 53 (2005)
Issue (Month): 2 (06)
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