The ability to deter entry requires
A) a credible threat that if entry occurs the firm is willing to produce more than they would otherwise.
B) a credible threat that if entry occurs the firm will not produce more than they would otherwise.
C) a good lawyer.
D) a clever accounting department.
A
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Suppose you have $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ Lemonade. Each company's stock currently sells for $100 per share. If the temperature next year is lower than average, the stock price for ABC will increase by $20, and the stock price for XYZ will not change. If the temperature next year is higher than average, the stock price for XYZ will increase by $20, and the stock price for ABC will not change. There is a 50% chance that it will be colder than average next year, and a 25% chance that it will be warmer than average. If you purchase two shares of ABC stock and no shares of XYZ stock, your expected gain will be ________.
A. $0 B. $20 C. $40 D. $30
Explain the two basic mechanisms that increase GDP per capita over the long term
What will be an ideal response?
A retired athlete built a gym near his house that could be used for free by all the residents in the neighborhood. However, the overuse of the facilities soon led to irreparable damages. This is an example of the ________
A) tragedy of the commons B) pecuniary externality C) paradox of thrift D) prisoners' dilemma
The objective of the Fed and the government is to
A. prevent asset bubbles by recognizing them in real time. B. mitigate the consequences of asset bubbles by recognizing them in real time. C. prevent asset bubbles by recognizing bad lending practices. D. mitigate the consequences of asset bubbles by recognizing bad lending practices.