-The Above Figure Shows the Payoff Matrix Facing an Incumbent

question 105

Multiple Choice

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.Assuming a fixed cost of entry,the incumbent will deter entry because

• A) it is more profitable than accommodating entry.
• B) it increases consumer surplus.
• C) the potential entrant winds up with zero profit.
• D) the incumbent would earn zero profit if it accommodated entry.

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Definitions:

Hypothetical Question

A question based on assumptions or hypothetical situations, used to explore outcomes or legal principles.

Closed-ended Question

A type of question formulated to receive a specific, often "yes" or "no", answer.

Active Listening

The act of listening attentively to the speaker’s message and responding by giving appropriate feedback to show that you understand what the speaker is saying. Restating the speaker’s message in your own words to confirm that you accurately interpreted what was said.

Passive Listening

The act of listening attentively to the speaker's message and responding to the speaker by providing verbal or nonverbal cues that encourage the speaker to continue. In effect, saying “I'm listening, please go on.”