 The Role of Entry in OligopolyP. J. Curwen Chapter Chapter 10 in The Theory of the Firm, 1976, pp 71-80 from Palgrave Macmillan Abstract: Abstract The literature on entry has become very extensive over the years.1 Although the question of entry-preventing behaviour was first raised by Kaldor,2 the main discussion arose out of the basic prediction of the model of monopolistic competition that firms would earn only normal profits in the long run, and that each firm would be operating with excess capacity (see p. 37). Harrod argued3 that firms would forgo some potential profit in the short run by setting a price lower than that which would maximise their profits in order to discourage new entrants into the industry. Subsequently, the discussion of the role of entry has largely evolved into an attempt to provide an answer to the question as to whether it is more profitable for a firm to maximise short-run profits in the knowledge that this will attract new entrants and hence erode the firm’s market share in the long run, or for a firm to deter entry by holding down prices in the short run in the expectation that it will be able to retain a substantial share of the market over time. These possibilities are illustrated in Figure 10.1. Keywords: Average Cost; Traditional Theory; Limit Price; Established Firm; Potential Entrant (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-15645-0_10 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-15645-0_10 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.