Refer to Figure 14-1. If Lexus lowers its price, will this deter BMW from entering the market?
A) Yes, because BMW will make a smaller profit than Lexus if it chooses to compete.
B) No, because BMW will be able to break Lexus' first-mover advantage.
C) No, because BMW will still make a profit of $120 if it competes with Lexus.
D) Yes, because BMW stands to lose $100 million if it competes with Lexus.
D
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