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nakungth nakungth
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6 years ago
To deter a potential entrant, an existing firm in a market may threaten to sharply increase production so that the entrant will be left with a small share of the market.  The firm can make this threat credible by limiting its own options, and possible actions of this type include:
A) signing long-term sales contracts that commit the firm to high levels of output.
B) building a very large factory that could potentially produce enough output to meet most of the market demand.
C) signing long-term purchase contracts for large amounts of production inputs.
D) all of the above
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
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oracledarrenoracledarren
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Posts: 455
6 years ago
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nakungth Author
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5 years ago
Thank you!
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