A health-care firm is looking to expand to international markets in an effort to increase profits. One potential has only a few competing health-care providers, each holding a significant percentage of market share. Licensing requirements are high, but the firm may consider establishing a presence in the new location to enjoy___.
A. The high prices the arise from perfect competition
B. The high prices that arise from monopolistic competition
C. The horizontal demand curves
D. The download-sloping demand curves
The correct answer is B. The high prices that arise from monopolistic competition.
In a market with few competing health-care providers, each holding a significant market share, there is likely to be less price competition. This can lead to higher prices for the health-care services provided. By establishing a presence in this new location, the firm can take advantage of the higher prices and potentially increase its profits.