Firm a currently monopolizes its market and earns profits


Firm A currently monopolizes its market and earns profits of $10M.Firm B is a potential entrant that is thinking about entering the market.If B does not enter the market, it earns profits of $0, while A continues to earn profits of $10M.If B enters, then A must choose between accommodating entry and fighting it.If A accommodates, the A earns $5M and B earns $5M.If A fights, both lose $5M.Draw the game in extensive form and predict the outcome. 

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Microeconomics: Firm a currently monopolizes its market and earns profits
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