Below is the question

ompletion Status: QUESTION 6 What is limit pricing? (a) Suppose your firm produces a product at a constant marginal cost equal to $1. Suppose the elasticity of demand is -3. What is the profit-maximizing price if one ignores the possibility of entry? (b) Suppose at the above price economic profits are quite large, so your firm can expect entry. Assume that if one firm enters it would increase the elasticity of demand from -3 to -4, while if two firms enter it would increase the elasticity of demand to -6. What do you recommend that the firm do to deter entry? Discuss briefly. TTT Arial 3 (12pt) Words:0 Path: p QUESTION 7 na the anod ownroduct and haliause the profit mavimizing pries is going to be $10 nor unit Than it learne that ite fived cast Supnoco a firm plane to in Save Click Save and Submit to save and submit. Click Save All Answers to save all answers. EC500 Study Guide.pdf Type here to search O ON