capacity
- This is a preview of the essay.
To view the full text you must login!
1) Over the course of a product life cycle, as the firm moves through the sequence of monopoly, oligopoly, monopolistic competition, and pure competition, the profit opportunities diminish. What strategies could the firm pursue to prolong its profitability?
a). The company will see maximum profits while in the Monopoly phase. In order to maintain this position, the firm must defend its patent and try to keep the Monopoly going for as long as it can. Creating superior products that are valuable to the customer will be hard to match by the competitors in the short run. During this stage, the firm should further invest in research and development to keep the barriers to entry high. The profits obtained should be used to investigate new innovative technology. By improving processes and refining production, the firm can continue to charge a reasonable price and stabilize demand. This strategy may produce more products for which a patent can be obtained...