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

Question

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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The Answer of 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

A Single Firm That Charges the Monopoly Price in the Market