An incumbent firm uses limit pricing
A) to set price below a potential rival's marginal cost, thus making entry unprofitable.
B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit.
C) when it has no other advantages over a potential rival.
D) if it is limited in the quantity of inputs it can purchase to produce output.
A
Economics
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In the Boeing/Airbus oligopoly example discussed in the text, why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?
What will be an ideal response?
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Which one of the following is not a function of money?
A. open market operation B. store of value C. medium of exchange D. unit of account
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