Video Game Consoles and Video Games Are Complementary Products: the Availability

question 42

Multiple Choice

Video game consoles and video games are complementary products: the availability of one increases the value of the other.In the past the suppliers of consoles were able to appropriate most of the profits generated by video game systems because:

• A)Video game consoles cost more to develop than video games.
• B)The consoles were more powerful determinant of the consumer experience than the games.
• C)The console suppliers controlled technology and distribution giving them more bargaining power than the suppliers of video games.
• D)The console makers-Nintendo,Sony and Microsoft-had bigger revenues and greater market capitalization than the suppliers of video games.

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Definitions:

Compounded Annually

Refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods, calculated once per year.

Future Value

The estimated value of an investment or loan including interest or dividends, at a specific future date.

Ordinary Annuity

A series of matching financial discharges made at interval ends throughout a fixed term.

Compounded Monthly

The process of adding interest to the initial amount of a loan or deposit on a monthly basis, causing the total amount to grow at an increasing rate.