Happy Campers wants to prevent Campers R Us from entering the camping market. If Happy Campers expands its capacity, the expansion can lead to all of the following except which one?
A)lower Happy Campers' profit- maximizing price
B)increase Happy Campers' marginal cost
C)lower Campers R Us' profit from entering the market
D)increase Happy Campers' profit- maximizing quantity

Question

Quizplus · Accepted Answer

Expanding capacity typically aims to lower marginal costs by achieving economies of scale, not increase them. Choices A, C, and D are potential outcomes of expanding capacity as they relate to pricing, market entry deterrence, and quantity adjustments, respectively.

Happy Campers Wants to Prevent Campers R Us from Entering