Fountain Plus, Inc. a manufacturer of bottled water, has enjoyed rapid growth in sales of one of its flavored water products, Xtrafresh, for which it has a patent, which has just expired. It now faces fierce competition from a number of other bottled water manufacturers in the case of Xtrafresh.

As a manufacturer in the bottled water industry, what type of market does Fountain Plus Inc. operate in before and after the patent expired? Explain why.

What will happen to Fountain Plus Inc. now that the patent has expired?

Economics by Michael Parkin ( CH 13 - 14)

Additional Info:

Monopolistic Competition / Monopoly / Patent / Legal Barriers / Natural Barriers / Perfect Competition