A Firm May Decide to Increase Its Scale So That

Multiple Choice

A firm may decide to increase its scale so that it has excess production capacity because, by doing so, it is able to

A) minimize its average cost of production.
B) establish a credible deterrent to the entry of competing firms.
C) take advantage of a dominant strategy in a prisoners' dilemma.
D) attain a Nash equilibrium and avoid repeated games.