In spite of being a price-setter (a company that can set its own price), why would a monopoly player choose to pursue cost reduction and demand stimulation strategies?
2006-10-21 07:30:51 · 2 answers · asked by hugh_grant27 1 in Education & Reference ➔ Higher Education (University +)
They want to pretend to have the consumers' interests at heart so that the govt does not open the industry to competition.
2006-10-21 07:33:15 · answer #1 · answered by Rich Z 7 · 0⤊ 0⤋
If you reduce cost you make more money. As simple as that.
If you were asking why would they choose to reduce PRICE, that's a different question. One reason could be to avoid problems with the Fed for abusing monopoly position. Another could be to indicate to potential new entrants that they are not able to make much money.
2006-10-21 07:41:12 · answer #2 · answered by Ivan 5 · 0⤊ 0⤋