Question: Why is a limit price strategy often effective at deterring new entrants in the industry? A . The incumbent firm s profitability increases. B .

Why is a limit price strategy often effective at deterring new entrants in the industry?
A. The incumbent firms profitability increases.
B. Companies will be forced to produce at excess capacity.
C. New entrants do not know the incumbents costs.
D. New entrants cannot build niche markets.
What is the correct answer?

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