Monsanto the maker of Nutrasweet owned the patent to asparta

Monsanto, the maker of Nutrasweet. owned the patent to aspartame, the official name of the sweetener. In 1987 Monsanto\'s patent expired in Europe, allowing other firmd to produce aspartame under other brand names. What impact do you think this had on the market for aspartame and Monsanto\'s profits?

Solution

Producing aspartame under new names, would substitute a few customers towards the new producers. However, brand loyalty would refrain customers from completely shifting towards new producers. The shift would be from monopoly to monopolistic competition and hence Monsanto\'s total profits would fall as a result of the new entry,