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Author Question: The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. The ... (Read 498 times)

pragya sharda

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on: Jun 18, 2019


The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. The potential entrant cannot earn a profit if the incumbent
◦ deters entry.
◦ chooses the Stackelberg leader level of output.
◦ shuts down.
◦ chooses the Cournot level of output.
Microeconomics ¦ Perloff ¦ 8th Edition
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Marked as best answer by pragya sharda on Jun 18, 2019

Dunkey

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Reply #1 on: Jun 18, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Beheh

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Reply #2 on: Jun 18, 2019


The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the incumbent will deter entry because
◦ it is more profitable than accommodating entry.
◦ the incumbent would earn zero profit if it accommodated entry.
◦ it increases consumer surplus.
◦ the potential entrant winds up with zero profit.


IRincones

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Reply #3 on: Jun 18, 2019
it is more profitable than accommodating entry.


Beheh

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Reply #4 on: Jun 18, 2019
Excellent


IRincones

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Reply #5 on: Jun 18, 2019
Great! Please up vote :D


shenderson6

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Reply #6 on: Jun 18, 2019


The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the outcome will be that the incumbent
◦ deters entry.
◦ deters entry and earns zero profit.
◦ chooses the Stackelberg leader level of output and the potential entrant enters.
◦ chooses the Stackelberg leader level of output but the potential entrant does not enter anyway.


soda0602

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Reply #7 on: Jun 18, 2019
deters entry.


mpobi80

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Reply #8 on: Jun 18, 2019


The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. If the fixed cost of entry were to increase, which of the following would occur?
◦ The incumbent shuts down.
◦ The incumbent chooses the Cournot level of output.
◦ The entry-deterring level of output rises.
◦ The entry-deterring level of output falls.


deja

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Reply #9 on: Jun 18, 2019
The entry-deterring level of output falls.


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