A model of entry prevention where the strategy of the incumbent monopolist is to overinvest in production capacity in order to make entry unprofitable is called the Bain, Modigliani, Sylos-Labini model.

Question

Quizplus · Accepted Answer

This model is known as the Limit Pricing model, primarily associated with Bain. The strategy involves setting prices low enough to deter entry, not specifically overinvesting in production capacity.

A Model of Entry Prevention Where the Strategy of the Incumbent