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What is one reason that investing in excess capacity

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Investing in excess capacity is one way to deter entrants because it lowers marginal costs. What is one reason that investing in excess capacity might not deter entry?

a) The excess capacity is far greater than market demand for the product

b) Creating the excess capacity has high fixed costs, but using it has low marginal costs

c) The firm cannot make a credible threat to actually use the excess capacity

d) The firm can credibly commit itself to lowering prices in response to entry

Reference no: EM133093097

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