A well-established manufacturing firm decides to set the market price of a product just low enough so that a new firm cannot pay the cost of entering a market and eventually be profitable. Which of the following is exemplified in this case?
A)A tit-for-tat strategy
B)An entry barrier
C)A strategic canvas
D)The Nash equilibrium

Question

Quizplus · Accepted Answer

This is an example of an entry barrier, as the established firm is intentionally setting a low price in order to prevent new firms from entering the market and being profitable.

A Well-Established Manufacturing Firm Decides to Set the Market Price