With regard to preventing entry,if identical firms act simultaneously,
A) they cannot credibly threaten each other.
B) they will all incur losses.
C) only one firm will enter the market.
D) none of them will enter the market.

Question

Quizplus · Accepted Answer

If identical firms act simultaneously, they cannot credibly threaten each other because they have the same capabilities and resources. As a result, they are unlikely to believe each other's threats and may both end up entering the market, leading to increased competition and decreased profits for both. Therefore, option A is the best choice.

With Regard to Preventing Entry,if Identical Firms Act Simultaneously