Which one of the following statements about Sutton's theory about the role of sunk cost in the determination of market concentration is the most accurate? A. Sunk cost should be treated as an endogenous variable for all industries. B. None of the other statements is accurate. C. Sunk cost can be treated as an exogenous variable in some industries, but should be treated as an endogenous variable for advertising or R&D intensive industries. D. Sunk cost should be treated as an exogenous variable for all industries
Which one of the following statements about Sutton's theory about the role of sunk cost in the determination of market concentration is the most accurate? A. Sunk cost should be treated as an endogenous variable for all industries. B. None of the other statements is accurate. C. Sunk cost can be treated as an exogenous variable in some industries, but should be treated as an endogenous variable for advertising or R&D intensive industries. D. Sunk cost should be treated as an exogenous variable for all industries
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 9CQ
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QUESTION 2
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Which one of the following statements about Sutton's theory about the role of sunk cost in the determination of market concentration is the most accurate?
A. Sunk cost should be treated as an endogenous variable for all industries.
B. None of the other statements is accurate.
C. Sunk cost can be treated as an exogenous variable in some industries, but should be treated as an endogenous variable for advertising or R&D intensive industries.
D. Sunk cost should be treated as an exogenous variable for all industries.
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