QUESTION 7 Consider an industry with two products A and B. There are 100 consumers who value product A at vA=160 and product B at vB=290. The incumbent firm 1 produces both goods. Its marginal cost of production for good A is CA-90 and cB1=120 for good B. Suppose the incumbent firm 1 offers the two products as a bundle at a price p1. There is also a potential new entrant, firm 2, who only produces good B at a marginal cost of cB2>0. This firm has to pay K=20 to enter the market. If it enters, it set a price p2 for good B and competes with the incumbent in prices for the consumers. Consider a game where the entrant decides whether to enter or not. Then if entry occurs, firms compete; otherwise firm 1 remains a monopolist. Which of the following statements is correct? [There may be more than one correct statement.] 000 Suppose firm 2 has entered the market. If cB2-70, consumers buy from the incumbent at an equilibrium price of 220. Suppose firm 2 has entered the market. If cB2=30, consumer buy from the entrant at an equilibrium price of 50. The entrant makes a profit of 24,000. Suppose firm 2 has not entered the market. Monopoly profits of firm 1 are 45,000. Suppose firm 2 has not entered the market. Monopoly profits of firm 1 are 24,000. If CB2