[Puzzle]Solve a Economic Problem

[SilentScope001]

Hello, my name is SilentScope001 and I am doing an experiment to test to see if a group of people can work together to solve a puzzle. I'm afraid the puzzle is too easy, but eh. Please help solve this problem, thanks. (I'm so sorry if this is too random...)

 

Here's a current delimma we are currently facing. I know we haven't signed the contract yet, but we really do need your help, and completing this quickly can help our future relationship. Please read quickly.

 

Currently, we are experimenting with a brand new artform known as "alternate reality gaming" or "viral marketing", with a way of gaining reveune through the selling of monthly subscriptions to the content. The game would be about a future war between Allied forces battling against an evil terrorist group known as the "Occidental Jihad" in a unstable fictional nation, where players would act as codebreakers and resistance fighters. Focus groups state that this would be very popular amongst the masses, after all, and I think such a game would honor those who are currently fighting the War on Terror.

 

The problem is, currently we are debating over two seperate ad campagins that we could use:

--a high-cost campagin where we will extensive advertising campagin, using television ads, billboards, and gurellia marketing. This would cost up $50,000 upfront and will lead to high demand in the first year when the game is released, low demand in the second year, and then zero demand in all subsequent years due to market oversaturation.

--A low-cost campagin where we rely solely on word-of-mouth about our ARG. It is free, but we'll start off with low demand for the first year. In the second year, we will have high demand, and then in all other years, zero demand due to market oversaturation.

 

Our economists state that high and low demand are estimated to be p=24-Y and p=20-Y respectively. P representing the price and Y representing how much quanity of subscriptions would be demanded. The cost to produce 'content' would cost $4 per each subscription, and that can basically be held constant.

 

However, we got ourselves a compeitior. Kompuclone will be able to produce a clone of our game within a year of its introduction The cost to produce 'content' for the game would still be $4 per game but Kompuclone must also pay a fixed set-up cost of $30 to begin production. Competition between our company and their company will be very harsh indeed, but we would be the only two major producers, and we would be a duopolist. If Kompuclone doesn't make any profit at all.

 

What we need to know is this: What sort of marketing campagin should we use and what would be the profit maximizing price of the game that we would slap onto the game during the marketing campagin? Our main goal would be to maxamize profit at all cost, so keep that in mind. It would be nice to tell us exactly how much profit we can stand to generate from it, but it's really up to you to decide what to tell us. Hopefully, you have a huge team of supporters who could easily help you solve this task.