-The Above Figure Shows the Payoff Matrix Facing an Incumbent

question 19

Multiple Choice

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.If the fixed cost of entry were to increase,which of the following would occur?

• A) The incumbent chooses the Cournot level of output.
• B) The incumbent shuts down.
• C) The entry-deterring level of output rises.
• D) The entry-deterring level of output falls.

---

Definitions:

Idea Generation

The creative process of generating, developing, and curating new ideas, which can serve as solutions to problems or lead to the development of new products, processes, or services.

Service

A service is an intangible economic activity offered by one party to another, often involving human or mechanical efforts to meet the needs or wants of the service buyer.

Good

A tangible product or item that consumers purchase to meet their needs or desires.

Product Line

A group of related products under a single brand sold by the same company.