Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because A. incumbents will act to prevent entry at all costs. B. fixed costs will be greater for the potential entrant than for the incumbent. C. for potential entrants the cost is avoidable, while for the incumbent, it is not. D. fixed costs are zero for the incumbent.
Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because A. incumbents will act to prevent entry at all costs. B. fixed costs will be greater for the potential entrant than for the incumbent. C. for potential entrants the cost is avoidable, while for the incumbent, it is not. D. fixed costs are zero for the incumbent.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter20: The Problem Of Adverse Selection Moral Hazard
Section: Chapter Questions
Problem 2MC
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Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because
incumbents will act to prevent entry at all costs.
fixed costs will be greater for the potential entrant than for the incumbent.
for potential entrants the cost is avoidable, while for the incumbent, it is not.
fixed costs are zero for the incumbent.
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