Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market?
A) Both offer DSL internet service; Xenophone earns a profit of $8 million and Gigacom earns a profit of $7 million.
B) Xenophone offers internet service via cable line and earns a profit of $4 million while Gigacom offers DSL internet service and earns a profit of $4.5 million.
C) Xenophone offers DSL internet service and earns a profit of $5 million while Gigacom offer internet service via cable line and earns a profit of $6.5 million.
D) Both offer internet service via cable line; Xenophone earns a profit of $6 million and Gigacom earns a profit of $9 million.
D
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Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one disadvantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would face unlimited liability. B) As a sole proprietor, Torrie would be subject to significant rules and regulations. C) As a sole proprietor, Torrie would be taxed twice. D) As a sole proprietor, Torrie would not have control of the business.
A monopolistically competitive market is described as one in which there are
A) a large number of firms selling similar, but not identical, products. B) one large firm and many small firms producing identical products. C) a few firms producing an identical product. D) a few firms producing differentiated products.