00:01
Okay, now suppose that we are a monopolistic competitor firm and that we've had a very successful advertising campaign.
00:12
Okay, so this successful campaign increases our demand curve.
00:18
And we want to know how this affects prices and quantity supplied.
00:26
So here in this graph, we have here in the black lines are going to be our original demand curve, margin cost.
00:32
Curve and marginal revenue.
00:36
This point here is where we produced before the success of the campaign.
00:44
And again, as a monopolist does, we charged at this point up here.
00:51
Now that the demand is going to increase because we had a very successful campaign, and that's this red line d2, which would say, again, that you would produce with mr equals mc.
01:05
But charge a much higher price.
01:10
Well, there's one thing that is missing, and that's this shift of the marginal revenue curve.
01:16
You have to be very aware that if the demand increases, so does marginal revenue.
01:26
Because marginal revenue is calculated from our perceived demand curve...