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Author Question: An incumbent monopolist producing more output than necessary might be able to keep potential rivals ... (Read 75 times)

justinmsk

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on: Jul 1, 2018
An incumbent monopolist producing more output than necessary might be able to keep potential rivals from entering
 
  A) by flooding the market with products below its marginal cost in the short run.
  B) if learning by doing reduces marginal cost.
  C) if the long-run marginal cost can be lowered below the potential entrant's short-run marginal cost.
  D) All of the above.

Question 2

The Lerner Index is derived from the profit-maximizing condition of a firm.
 
  Indicate whether the statement is true or false


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wshriver

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Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

True . Start out with MR = MC, realize that MR = P(1 + 1/e), and solve.


justinmsk

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Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

Zebsrer

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Reply 3 on: Yesterday
Excellent

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