Why is a limit price strategy often effective at deterring new entrants in the industry? Companies will be forced to produce at excess capacity. New entrants cannot build niche markets. New entrants do not know the incumbents costs. The incumbent firms profrtabing ncreases: Why is it important for firms to forecast large increases in demand in the product market and move to satisfy that demand? to preempt tivals to improve tacit coordination between firms to implementa capacity-control stratby to preventirst-mover advantage How can a company improve market development when locating new market segments in which to compete? by preempting rivals by controlling capacity by capitalizing on the brand name by threatening a price war