# Effect on monopoly price

Suppose a monopolist adopts a technology that allows him to produce his product at lower cost. What is the likely effect on the monopoly price ?

• This is a simple shift in the supply-demand model. – DornerA Apr 26 '16 at 14:20

$P=\frac{\epsilon}{\epsilon +1} MC$
Now, it is clear that a firm with monopoly power will never set $P=MC$. However, we can assume for now that the term involving epsilon is fixed for our firm with monopoly power.