Limit pricing will effectively deter entry when
A)the incumbent links the pre-entry price to post-entry profits.
B)the incumbent has incomplete information.
C)the entrant must commit to enter the market.
D)all of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Limit pricing deters entry when the incumbent sets a low price to signal to potential entrants that entering the market would not be profitable, linking pre-entry price to post-entry profits.

Limit Pricing Will Effectively Deter Entry When