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Ship agents play an important role in shipping operation management. Suppose the market for ship agency servicesis highly competitive and ship agents try to stay competitive through service differentiation and keeping their costs low. Suppose further that the market for ship agency services is in equilibrium, when a ship agent develops a new app available for free for its customers (ship operators) to use their smart phones to monitor their ships' operations while receiving the agent's services. As a result, the agent is able to attract many customers from its competitors and increase its revenue far exceeding a small cost of developing the app
a) Use a graph to show the impact of the new app on the agent's profit in the short term.
b) Explain how the company's profit would likely change in the long term. Use a graph to illustrate your answer. Make relevant assumptions if necessary.
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