In order for “limit pricing” to be effective, the firm practicing such
In order for “limit pricing” to be effective, the firm practicing such a strategy must be able to charge a price that is:
A) lower than the potential entrant’s ATC but greater than the firm’s own ATC.
B) greater than the potential entrant’s ATC but lower than the firm’s own ATC.
C) lower than the potential entrant’s ATC but greater than the firm’s own AVC.
D) greater than the potential entrant’s ATC but lower than the firm’s own AVC.
ANSWER
A
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