A first mover is dominating a market, with revenues of $40 million annually. The average total cost for the firm is $20 million, of which $19 million is fixed. How can the first mover keep others from entering the market?
Being the first producer in a market allows the firm to have advantages over potential new entrants to the market, but they can be significantly hurt if they do not protect themselves against competition.
Answer and Explanation:
The biggest problem with a first mover is that future competitors can observe what they have done or discovered and be able to enter the market and...
See full answer below.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Intro to Business: Help and ReviewChapter 1 / Lesson 8