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2. Suppose there 13 a sandwich shop (incumbent) selling lemonade and sandwiches separately. There 13 a potential entrant to the market that only sells lemonade

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2. Suppose there 13 a sandwich shop (incumbent) selling lemonade and sandwiches separately. There 13 a potential entrant to the market that only sells lemonade and the lemonade 13 identical from etther firm. The table below depicts the valuation (willingness to pay) for lemonade and sandwiches of different consumers. The potential entrant has fixed costs of 32 and a marginal cost of $1 for producing lemonade. The incumbent has a marginal cost of $1.50 for producing lemonade and $1.50 for producing sandwiches. There are extra columns in the table that can be used for calculations

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