A firm may build a large amount of excess capacity which they do not use. In response, new firms do not enter the market and existing firms do not lower prices. This is because the excess capacity is... Question 18 options: a threat to flood the market with goods and cause prices to fall if other firms step out of line. a method of price matching where the firm adjusts output to meet demand. an indication that the firm will merge with other companies to form a monopoly. a method of reputation-building to prevent 'temporary' firms from entering when times are good and exiting when times are bad