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Assignment -
Read the article "Chapters speeds up Superstore expansion," (Globe and Mail, September 1997). And answer the questions -
a. Draw a diagram with two short-run average cost curves, one for a mall-sized bookstore and one for a superstore. Show the relevant portion of the long-run average cost curve. Explain your diagram.
b. In general, what determines whether there is room for one, two or more firms in a market?
c. Explain, using ideas from game theory, why the "...first into a market has a great advantage." Does it matter whether there is room for one or two firms? Explain.
Attachment:- Article.rar
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