Question: 3. Consider the case now in which IW chooses to invest (c.g. INV = 500). How do quantities, price, and profits change? 4. Should IW

3. Consider the case now in which IW chooses to invest (c.g. INV = 500). How do quantities, price, and profits change? 4. Should IW choose to invest in the new cost reducing technology? Explain. 5. Given your answers to the above, characterize the Subgame Perfect Nash Equilibrium (SPNE) of this game. Is IW's investment choice a credible threat to EW's entry? Explain. 6. Suppose that Watcha-call-its! are in fact much more popular than everyone initially thought! In fact, publicly available market research shows that demand for WC is actually

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