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:

Austrian Empire

A centralized absolute monarchy in Central Europe from 1804 to 1867, which became the Austro-Hungarian Empire after the Compromise of 1867.

Multi-lingual

The ability of an individual or system to communicate effectively in multiple languages.

Italian Unification

The political and social movement that consolidated different states of the Italian peninsula into the single state of Italy in the 19th century.

Political Structures

The organizational frameworks and institutions through which societies govern and make decisions.