Answer to Question #117353 in Microeconomics for Anisha

Question

What effect will the simultaneous launch of a new smartphone and a decrease in the price of a competitor have on the market for smartphones?

Answer 1

If the company launches a new smartphone on the market, then a higher demand for these products is expected. However, taking into account the fact that when competitors lower the price of a similar model, demand should decrease, then these two events that have occurred simultaneously can lead to a position of gross profit stability.