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    G Pharmaceuticals Case: How would a new entrant in the market affect the market demand curve?

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    In qualitative terms, discuss how G's potential entry into the market would affect the market demand curve for cures for the common cold and A's (firm-specific) demand curve for T.

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    We first assume that G, without fearing about A's "incredible threat", has chosen to enter the market.
    And A will not limit its price at $4, and adopt different pricing strategies to compete with G and to maximize its profit.
    Since both firms provide very similar goods to the market and their products are substitutes for each other. The consumers can shift between the two firms, without changing the total quantity of demand. Therefore, when their products are ...

    Solution Summary

    This solution shows how to calculate the effects on the market demand curve in an attached Word document in 332 words.

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