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Suppose a New Low Cost Discount Firm Must Decide in Advance

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Suppose a new low cost discount firm must decide in advance between introducing LARGE or SMALL capacity in a licensed cable TV market where the incumbent then will decide on a HIGH or MATCHING pricing response.If the following table describes the payoffs from various combinations of these strategies,what capacity will the new entrant choose and why? Suppose a new low cost discount firm must decide in advance between introducing LARGE or SMALL capacity in a licensed cable TV market where the incumbent then will decide on a HIGH or MATCHING pricing response.If the following table describes the payoffs from various combinations of these strategies,what capacity will the new entrant choose and why?

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The new entrant must recognize that the ...

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