Megafirm Is the Only Provider of Products in the Seven

Megafirm is the only provider of products in the Seven Corners region,a sparsely populated area out west.It currently has a small distribution center and two retail outlets.Gigafirm has threatened to open a competing business in the Seven Corners region.Megafirm has publicly stated that,if Gigafirm comes in,Megafirm will flood the market with goods,driving down prices and forcing Gigafirm out.Suppose that expansion would cost the firm $100,000 and that Megafirm's profits are $1,000,000 per year when it is the only firm in the region regardless of whether it expands or not.Both firms would earn $350,000 if Gigafirm entered and Megafirm remained a small operation,and both would earn -$100,000 if Gigafirm entered and Megafirm expanded.
Megafirm's threat to expand if Gigafirm enters is

A) not credible because $350,000 is better than -$100,000.
B) not credible,because it is inevitable that Gigafirm will enter in response to the profit incentive.
C) credible,because Megafirm will experience economies of scale.
D) not credible,because threats are not enforceable contracts.