Suppose Orange Inc sells MP3 players and initially has monopoly power
Suppose Orange Inc sells MP3 players and initially has monopoly power because there are only a few close substitutes available to consumers.
As more types of MP3 players are introduced into the market, the demand facing Orange becomes ________ elastic and the Lerner index achieved by the firm in this market ________. A) less, declines
B) less, increases
C) more, declines
D) more, increases
ANSWER
C
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