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True or false and explain. An incumbent monopolist whose current capacity equals the profit-maximizing quantity for its market and who faces the threat of potential
True or false and explain.
An incumbent monopolist whose current capacity equals the profit-maximizing quantity for its market and who faces the threat of potential entry into this market from another firm, can never find it profitable to build additional capacity because whether or not the rival firm enters, the monopolist will never use the additional capacity and thus the cost of increasing its capacity is a waste.
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