To Deter a Potential Entrant, an Existing Firm in a Market

question 135

Multiple Choice

To deter a potential entrant, an existing firm in a market may threaten to sharply increase production so that the entrant will be left with a small share of the market. This may be a credible threat if:

• A) production exhibits economies of scale.
• B) production exhibits diseconomies of scale.
• C) production costs may fall due to learning-by-doing.
• D) A and C are correct.
• E) B and C are correct.

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Definitions:

Team Productivity

The measure of the effectiveness and efficiency of a team in accomplishing its goals and tasks.

Consensus

A general agreement reached by a group as a whole, where most members support the decision even if it's not their first choice.

Evidence-Based Leadership

Leadership practices that are guided by the clear, logical, and consistent use of the best available evidence from multiple sources to make decisions.

Proven Effective

Demonstrated through evidence or experience to achieve intended results or success in a reliable manner.