lower profits

increased product variety

limit pricing

makes a product identical to its rivals

faces a perfectly inelastic demand for its product

considers the reaction of its rivals when it determines its price policy

firms have no market power

the government is forced to get involved with setting prices

firms follow the pricing strategies of a dominant firm

firms compete perfectly

product differentiation

demand for each firm's products to decrease

prices to rise

marginal costs are negative

firms cannot profitably exclude free-riders

consumers will reveal true willingness to pay

significant amount of income spent on the good

fewer substitutes

many close substitutes

short time horizon

has inelastic demand and is greater than 1

positive and greater than 1

negative and large in magnitude

Zero