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Are preentry prices the right prices

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Airfares between London and New York appear to be well above average cost and the handful of incumbents are making money hand over fist. Your cousin enters with a discount airline, but soon runs into financial difficulties when the incumbents match his fares. He complains to you about their predatory behavior and asks you to prepare an antitrust monopolization suit. Why might you disagree with his analysis? Are preentry prices the right prices for determining the profitability of entry?

Reference no: EM13890031

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