申論題

6. (15 points) Suppose the market demand is p = 10 - Q, and firms incurs a fixed cost of $5 and no marginal cost. Assume that Firm A is the incumbent firm in this market, and there is a potential entrant Firm B, in which, their quantities are denoted as qa and qB, respectively.

(2) Can Firm A deter the entry of its rival, Firm B? If yes, how?