If the game in Scenario 13.17 were to be infinitely repeated, waging a price war might be a rational strategy
A) because there would be no short-term losses.
B) because the short-term losses might be outweighed by long-term gains from preventing entry.
C) if the potential entrant were irrational.
D) if the monopolist had excess capacity.
E) if there were no sunk costs to the potential entrant.
B
Economics
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Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in demand, the equilibrium quantity of drugs
A) will increase. B) will decrease. C) will not change. D) may or may not change.
Economics
Why are losses acceptable in the short run but not the long run?
What will be an ideal response?
Economics