Explain Why Selling Output at a Price Below That at Which

question 169

Essay

Explain why selling output at a price below that at which marginal revenue equals marginal cost might serve to deter entry of a potential competitor.

---

Definitions:

Bearer Instrument

A bearer instrument is a type of document that allows the holder to claim the rights or assets it represents without endorsing or proving ownership.

Order Instrument

A financial document that is payable to a specified person or entity, such as a check, which requires endorsement for cashing or deposit.

Endorsed

Officially approved or supported, or signed on the back to transfer ownership or to show agreement.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another in a manner that the transferee obtains a good title.