Discourage entry into the industry

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Advertising is one way existing firms can impose heavy costs to discourage entry into the industry. For? example, suppose an existing firm spends ?$200 000 on advertising costs and sells 100 00 units of output. Now assume a new entrant comes into the industry. The new entrant decides to match the existing firms advertising expenses but only sells 20 000 units of output.

The per unit cost of advertising for the existing firm is ?$?

Reference no: EM131962131

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