The ability to deter entry requires
A) a credible threat that if entry occurs the firm is willing to produce more than they would otherwise.
B) a credible threat that if entry occurs the firm will not produce more than they would otherwise.
C) a good lawyer.
D) a clever accounting department.

Question

Quizplus · Accepted Answer

The ability to deter entry requires a credible threat that if entry occurs the firm is willing to produce more than they would otherwise. This is because if the firm is able to produce more than they would otherwise, they can use the threat of increased production to lower the potential profits for new entrants, making it less attractive for them to enter the market.

The Ability to Deter Entry Requires