Question

A new competitor enters the industry and competes with a second​ firm, which had been a monopolist. the second firm finds that although demand is not perfectly​ elastic, it is now relatively more elastic. the second​ firm's marginal revenue will be​ _____________ and its​ profit-maximizing price will be​ ___________

Answer 1

The second firm finds that though demand is not perfectly elastic, it is now comparatively more elastic. The second firm marginal revenue will be more elastic and its profit maximizing price will be lower. A monopolist probably also considers in policies that indulgence monopolies since it gives them greater power. A monopolist has slight incentive to progress their product because customers have no replacements. Instead, the motivation is dedicated on defending the monopoly.