Consider an industry with two products A and B. There are 100 consumers who value product A at vA=160 and product B at vB=290.

The incumbent firm 1 produces both goods. Its marginal cost of production for good A is cA=90 and cB1=120 for good B. Suppose the incumbent firm 1 offers the two products as a bundle at a price p1.

There is also a potential new entrant, firm 2, who only produces good B at a marginal cost of cB2>0. This firm has to pay K=20 to enter the market. If it enters, it set a price p2 for good B and competes with the incumbent in prices for the consumers.

Consider a game where the entrant decides whether to enter or not. Then if entry occurs, firms compete; otherwise firm 1 remains a monopolist.

Which of the following statements is correct? [There may be more than one correct statement.]

Suppose firm 2 has entered the market. If cB2=70, consumers buy from the incumbent at an equilibrium price of 220.

Suppose firm 2 has entered the market. If cB2=30, consumer buy from the entrant at an equilibrium price of 50. The entrant makes a profit of 24,000.

Suppose firm 2 has not entered the market.Monopoly profits of firm 1 are 45,000.

Suppose firm 2 has not entered the market. Monopoly profits of firm 1 are 24,000.

If cB2<50, then entry always occurs.

If cB2=20 and K=2,000, then entry occurs.

If cB2=40 and K=500, then entry occurs.

If K=4000 and cB2<10, then entry occurs.

If there is no cost of entry for the entrant (K=0), the incumbent remains a monopolist if cB2=60.

If there is no cost of entry for the entrant (K=0), the incumbent remains a monopolist if cB2=40.