Because demand (and marginal revenue) have fallen the new
profit maximizing price/output combination has fallen as well
to P2 and Q2. 
Because demand (and marginal revenue) have fallen the new
profit maximizing price/output combination has fallen as well
to P2 and Q2.
This is the same qualitative result we found in our study
of simple supply and demand, a reduction in demand leads to a
reduction in both price and output. However we have to investigate
the effects on profit to determine if this is a long run equilibrium.
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