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Is this technology characterized by economies of scale

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Reference no: EM13326952

2. Suppose that the cost function for both the entrant and an incumbent is

C(q) = f + cq.

(a) Is this technology characterized by economies of scale? What is marginal cost and how does it compare to average cost?

(b) Suppose that postentry the incumbent can commit to charge p = c.Will there be entry?

Reference no: EM13326952

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