Neither excess capacity nor limit pricing are meaningful barriers if firms aren't willing to forgo some profits in the short run. Giving up profits in the short run is only rational if the firm believes it will successfully forestall entry in the long run.

Whether firms will engage in such behaviors is a somewhat more complex issue than can be resolved with our understanding of profit maximization. Still these behaviors would only make sense if they lead to greater profits overall, and if the firm believes that they do.

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