Part (a) shows the market demand for toothbrushes.
Part (b) shows the demand for toothbrushes as seen by Firm A.
At a market price of $1.50, elasticity of market demand is −1.5.
Firm A, however, sees a much more elastic demand curve DA because of competition from other firms.
At a price of $1.50, Firm A’s demand elasticity is −6.
Still, Firm A has some monopoly power: Its profit-maximizing price is $1.50, which exceeds marginal