Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 11

Consider the market for high-definition televisions, which can be expected to grow in popularity over time as consumers become familiar with it and more programs are developed for it. If there is a first-mover advantage in building capacity, what determines which firm will move first? If firms race to preempt each other to be the first mover, is there some profit-maximizing condition that would determine how long before the anticipated peak in demand firms would start building capacity?