A Single Firm That Charges the Monopoly Price in the Market

question 56

Multiple Choice

A single firm that charges the monopoly price in the market earns $1,300.If another firm successfully enters the market,the incumbent's profits fall to $700 and the entrant earns $575.If the interest rate is 0.5,how high must the firm's profits from limit pricing be for limit pricing to be a profitable strategy for the incumbent?

• A) π^L > $200
• B) π^L > $500
• C) π^L > $900
• D) π^L > $1,000

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Definitions:

Parental Strand

The original strand of DNA that serves as a template for the production of its counterpart in DNA replication, ensuring genetic information is accurately passed on.

Adenine

One of the four nucleotide bases found in DNA and RNA, which pairs with thymine in DNA or uracil in RNA.

DNA Replication

Synthesis of a new DNA double helix prior to mitosis and meiosis in eukaryotic cells and during prokaryotic fission in prokaryotic cells.

New Strand

In DNA replication, refers to the newly formed daughter strand of DNA that is synthesized by the enzyme DNA polymerase.