2 In Section 10.1.2, we showed that when the market demand function was given by p =...
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2 In Section 10.1.2, we showed that when the market demand function was given by p = 120 − (K1 + K2), the incumbent firm deterred entry by producing the level of output and earned profits π1d given by:
If the incumbent accommodated entry, the incumbent earned profits in the Stackelberg equilibrium given by:
The incumbent firm 1 and the entrant firm 2 produced output given by:
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