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
A) it is more profitable than accommodating entry.
B) it increases consumer surplus.
C) the potential entrant winds up with zero profit.
D) the incumbent would earn zero profit if it accommodated entry.
A
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A Lorenz curve measures the ________ on the vertical axis
A) cumulative percentage of money income B) cumulative percentage of family wealth C) cumulative percentage of families D) demand of families on welfare
At a profit-maximizing output level,
a. marginal revenue minus marginal cost equals zero. b. marginal profit equals zero. c. the slope of the total profit curve is zero. d. All of the above are true.
The aggregate demand is described graphically as a. sloping downward. b. a vertical line
c. a horizontal line. d. sloping upward.
If aggregate supply is upward sloping, fiscal stimulus causes _______ in aggregate demand and _______ in prices.
A. A decrease; a decrease B. A decrease; an increase C. An increase; a decrease D. An increase; an increase