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MBA,PHD, Juris Doctor
Strayer,Devery,Harvard University
Mar-1995 - Mar-2002
Manager Planning
WalMart
Mar-2001 - Feb-2009
Question 6-8
Suppose a market is currently monopolized by firm A, with the market demand being: Q=100-P. Firm B is contemplating entering this market. Further, suppose A and B have total costs that are zero at all output levels.
6. Assuming the Sylos Postulate holds, if B enters the market then A will see profit fall to:
a.$2500
b.$1250
c.$625
d.none of the above
Â
7.the limit price equals $0
True or False
Â
8.this is a case of blockaded entry.
True or False
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