Why a monopoly exits a market when its demand curve shifts

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AT&T Inc., the large U.S. phone company and the one-time monopoly, left the payphone business because people were switching to wireless phones (Crayton Harrison, "AT&T to Disconnect PayPhone Business After 129 Years," Bloomberg.com, December 3, 2007). The number of wireless subscribers quadrupled in the past decade: 80% of U.S. phone users now have mobile phones. Consequently, the number of payphones fell from 2.6 million at the peak in 1998 to 1 million in 2006. (But where will Clark Kent go to change into Superman now?) Use graphs to explain why a monopoly exits a market when its demand curve shifts to the left.

Reference no: EM131345489

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