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Let's stick with the same smartphone producer from the previous example. If the firm reduces its price slightly, it finds that there are no additional
Let's stick with the same smartphone producer from the previous example. If the firm reduces its price slightly, it finds that there are no additional customers willing to purchase a phone at $490, or $450, or $400, etc. At a price of $200, however, two new customers would buy the smartphone (in addition to the customer with a WTP of $500). What is the firm's revenue at a price of $200? $100 $200 $400 $600
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