A form of strategic entry deterrence is

Question

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Forming a cartel (choice A) is a form of collusion between firms in which they agree to limit output and keep prices high to deter new firms from entering the market. However, cartels are illegal in many countries and can be difficult to maintain.

Maintaining excess capacity (choice B) is a form of strategic entry deterrence in which incumbent firms have the ability to quickly and easily increase production to match any increased supply from new entrants. This can make it difficult for new firms to compete on price, and may therefore delay or deter their entry into the market.

Limit pricing (choice C) is a pricing strategy in which incumbent firms set prices low enough to make it unprofitable for new firms to enter the market. The idea is that by keeping prices low, the incumbent firm can maintain its market share and prevent new entrants from gaining a foothold.

Both maintaining excess capacity and limit pricing (choice D) are effective forms of strategic entry deterrence that can make it difficult for new firms to enter the market and compete with incumbent firms.

A Form of Strategic Entry Deterrence Is