Monsanto reduced the price by an average of $9\%$ a year. When volume increased by an average of $22\%$ a year, revenue and profits exploded. See Table $1$ and Exhibit $1.$ Glyphosate$-$based herbicides produced net sales for Monsanto of $$2\mathrm{.}4$b in $2001$ alone, nearly half the companys total.Another factor in Roundups success was the increasing popularity of conservation tillage, an environmentally friendly method of farming in which crops are planted without first plowing the elds. With less plowing, there is less loss of topsoil and moisture. The problem is weeds. Instead of plowing them under, farmers eliminate weeds before planting by applying a nonselective herbicide such as Roundup. Analysts suggest that conservation tillage is sensitive to the price of herbicides, an important element in its cost.A third factor was the development of herbicide$-$tolerant crops. Monsantos Roundup Ready corn was approved in $1998,$ and soybeans followed shortly thereafter. Monsanto argued that Roundup and Roundup Ready seeds were complementary products, with price reductions in one increasing demand for the other.Even as patents expired, Monsanto was able to maintain high market shares. In Brazil, for example, Monsantos patent expired in $1981,$ yet its $2001$ market share was $81\%.$ High market share, in turn, allowed Monsanto to exploit economies of scale and work its way down the learning curve.PostscriptMonsanto remains a high$-$risk company with strong upside potential. When the US patent expired, Roundup revenue dropped sharply, leaving Monsanto increasingly reliant on biotechnology. With exposure to Latin America compounding the fall in Roundup revenue, the share price fell $50\%$ in mid$-2002,$ leading to the December resignation of CEO Hendrik Verfaillie.Questionsa$)$ In a paragraph, summarize the background of the case and its development.b$)$ How do you know that cutting the price of Roundup w$)$ How might you estimate the elasticity of demand and the profit$-$maximizing price for $1995?$