A health care firm is looking to expand to international markets in an effort to increase profits. One potential location has only a few competing health care providers,each holding a significant percentage of market share. Licensing requirements are high, but the firm may consider establishing a presence in the new location to enjoy ___.
the high prices that arise from perfect competition
The high prices that arise from monopolistic competition
The horizontal demand curves
The downward sloping demand curves
3 answers
The high prices that arise from monopolistic competition
it’s the downward sloping demand curves
Yes, you're correct. The firm may consider establishing a presence in the new location to enjoy the downward sloping demand curves, which indicate that as the firm increases its prices, it can still attract customers and generate higher profits. This is because there are few competing health care providers and high licensing requirements, creating a relatively limited supply in the market.
1 answer