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July 29, 2015

Homework Help: Managerial Economics

Posted by Dee on Wednesday, June 4, 2008 at 8:54pm.

Tots-R-Us operates the only daycare center in an exclusive neighborhood just outside of Washington, DC. Tot-R-Us is making a substantial economic profit, but the owners know that new daycare centers will soon learn of this highly proftable market and attempt to enter the marker. The owner decide to begin spending immmediately a rather large sum mon advertising designed to decrease elasticity. Should they wait unitl new firms actually enter? Explain how advertising can be employed to allow Tots-R-Us to keep price above average cost with encouraging entry.

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