If an incumbent threatens to retaliate against entry, but its profits are greater under accommodated entry than under the proposed threat, potential entrants will ignore the threat
What will be an ideal response?
True. The threat is not credible since the incumbent firm is better off accommodating entry than retaliating.
Economics
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Explain why there is an incentive to cheat in collusive oligopoly. How does such behavior threaten collusive oligopoly over time?
What will be an ideal response?
Economics
An example of a negative externality in consumption is
A. A power plant's release of thermal pollution into a nearby river. B. A large cattle farm creating air pollution. C. A passenger on a train littering. D. You finishing college and contributing to society.
Economics