Managerial Economics 2nd Edition by William Boyes

تمرين 1

You are considering entering amarket serviced by a monopolist. You currently earn $0 economic profits, while the monopolist earns $5. If you enter the market and the monopolist engages in a price war, you will lose $5 and the monopolist will earn $1. If the monopolist doesn't engage in a price war, you will each earn profits of $2.
There are two possible solutions or equilibria. What are they?