M 3 0 M S M G D V D B T 5 X BC EI ONE MY * C G q BI E1 4 + = E A E H I Q 1 MY * C Gg: + V X C @ Archivo | C:/Users/Allison%20Alvarez/Downloads/dfgif.pdf%20(1).pdf E dfgif.pdf (1).pdf 5 / 9 - 100% + Case 5 2 An established company is earning profits Bm. Senses the threat of entry from a potential competitor. The cost to the incumbent of creating an effective barrier to entry 3 is E. If the potential entrant does enter the market, then the benefits to the incumbent will be Bd, while the potential entrant would have Bd - F, where F is fixed (and sunk) costs of entry. The incumbent must decide whether or not to create the strategic barrier, and may make this decision before the entrant can make its decision. In which case will you do it (state the required conditions)? How should Bd and F be so that we are in a natural monopoly situation? What is the advantage of the established company in this case? 5 17C 2 ESP 13:30 Parc. nublado LAA 6/11/2022