In (a),the demand curve D shifts to new demand curve D2. But the new marginal revenue curve MR2 intersects marginal cost at the same point that the old marginal revenue curve MR did. The profit-maximizing output therefore remains the same, although price falls from P to P2. In (b),the new marginal revenue curve MR2 intersects marginal cost at a higher output level Q2.But because demand is now more elastic,price remains the same. In (a), the demand curve D1 shifts to new demand curve D2 . But the new marginal revenue curve MR2 intersects marginal cost at the same point that the old marginal revenue curve MR1 did. The profit-maximizing output therefore remains the same, although price falls from P1 to P2 . In (b), the new marginal revenue curve MR2 intersects marginal cost at a higher output level Q2 . But because demand is now more elastic, price remains the same