An Incumbent's Threat to Retaliate After a Potential Competitor Enters

question 54

Multiple Choice

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

• A) the incumbent can still earn a profit after carrying out the threat.
• B) the incumbent earns greater profit carrying out the threat than by accommodating entry.
• C) the potential entrant cannot earn a profit if the threat is carried out.
• D) the potential entrant's profit exceeds the incumbent's if the threat is carried out.

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Definitions:

RC Parallel Circuit

An electrical circuit that contains both a resistor (R) and a capacitor (C) connected in parallel.

R

Symbol commonly used to represent resistance in an electrical circuit.

Reactive Power

The portion of electricity that oscillates between the source and load, essential for maintaining voltage levels in AC power systems but not converted into usable work.

Phase Angle Shift

See phase shift.