Which of the Following Is Not a Condition Under Which

Multiple Choice

Which of the following is not a condition under which an incumbent firm can successfully deter entry by holding excess capacity?

A) The investment in excess capacity must be sunk prior to entry
B) The incumbent should have a sustainable cost advantage
C) Market demand growth should be slow
D) The potential entrant should not itself be attempting to establish a reputation for toughness
E) The excess capacity investment must be recoverable prior to entry