After a Year,what Will the Market Share for Each of the Three

question 21

Essay

After a year,what will the market share for each of the three companies be? Assume = 0.10, = 0.15,and = 0.20.(Hint: Use the RISKBINOMIAL function to model how many people switch from A,then how many switch from A to B and from A to C.)

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to normal goods.

Quantity Demanded

The total amount of a good or service consumers are willing and able to purchase at a given price level.

Increase in Price

A situation where the cost of goods or services rises, potentially due to factors like higher demand, production costs, or inflation.

Supply and Demand

Supply and demand is an economic model that explains the interaction between the availability of a resource and the desire for that resource, affecting its price.