-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.

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Definitions:

Wilcoxon Signed Rank Test Statistic

A non-parametric statistical test used to compare paired samples, assessing whether their population mean ranks differ.

Continuity Correction

An adjustment made to discrete data in order to apply a continuous probability distribution approximation more accurately.

Null Hypothesis

A statement or hypothesis that proposes there is no statistical significance in a set of given observations, suggesting any observed difference is due to sampling or experimental error.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are from their average.