Imagine that you are managing a small firm and thinking about entering the market of a monopolist. the monopolist is currently charging a high price, and you have calculated that you can make a nice profit charging 10% less than the monopolist. before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?

The goal of an economist who formulates new theories is to a. provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. b. provoke stimulating debate in scientific journals. c. contribute to an understanding of how the world works. d. demonstrate that economists, like other scientists, can formulate testable theories.