Deterring Entry Might Require a Firm to

question 89

Multiple Choice

Deterring entry might require a firm to

• A) price their product closer to the competitive price than to the monopoly price.
• B) price their product closer to the monopoly price than to the competitive price.
• C) drop output almost to zero to show the consumers "who's boss."
• D) drop price almost to zero to get price below marginal cost.

---

Definitions:

ATC

Stands for Average Total Cost, which is the sum of all production costs divided by the quantity of output produced.

Short Run

A period in economics during which some factors of production are fixed, making it impossible for a business to change major production facilities.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; it decreases as production increases.

Output

The cumulative output of goods and services from a company or an economic system.