Tourist-trap model Monopoly price is pl an equilibrium price? No (Just repeat the previous argument) A firm wants to charge p2Pl+8=P+28 Repeating argument: only possible single price equilibrium is monopoly price where no firm wants to charge more and if it does not pay for a firm to cut price, monopoly price will indeed be an equilibrium price. a deviant firm which with all firms charging the monopoly price will like to lower price only if it can induce new consumers to search for this low price shop Hence it has to lower price by more than the amount of the searchTourist-trap Model