How to enter a market which is serviced by a monopolist

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Reference no: EM13221412

A firm (You) has to decide whether or not to enter a market which is serviced by a monopolist. Currently the monopolists earns $6 economic profits, while you earn $0. If you enter the market and the monopolist doesn't engage in a price war, you will each earn profits of $3. If the monopolist engages in a price war, you will lose $6 and the monopolist will earn $2.

Reference no: EM13221412

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