Figure 4
The horizontal axis is labeled “X”. The horizontal axis shows three marked points labeled from left to right: “alpha minus c divided by 2 theta minus phi”, “alpha minus c divided by phi”, and “alpha minus c divided by 2 phi minus theta”. The vertical axis shows three marked expressions from top to bottom: “1 divided by beta open parenthesis alpha minus c divided by 2 close parenthesis squared”, “1 divided by beta open parenthesis alpha minus c divided by 3 close parenthesis squared”, and “1 divided by beta open parenthesis alpha minus c close parenthesis squared open parenthesis theta minus phi divided by 2 theta minus phi close parenthesis”. Two decreasing curves are shown. One solid curve starts at the vertical axis at the level “1 divided by beta open parenthesis alpha minus c divided by 3 close parenthesis squared” and decreases linearly to a low point corresponding to the vertical axis at “1 divided by beta open parenthesis alpha minus c close parenthesis squared open parenthesis theta minus phi divided by 2 theta minus phi close parenthesis”. From this low point, a solid curve decreases concave down toward the horizontal axis, reaching “alpha minus c divided by phi”. A second dashed curve starts higher at the vertical axis near “1 divided by beta open parenthesis alpha minus c divided by 2 close parenthesis squared” and decreases concave up more gradually. The two curves intersect at a point above the horizontal axis aligned with “alpha minus c divided by 2 theta minus phi”. A vertical dashed line extends downward from this intersection to the horizontal axis at this point. A horizontal dashed line extends from the vertical axis at the level “1 divided by beta open parenthesis alpha minus c close parenthesis squared open parenthesis theta minus phi divided by 2 theta minus phi close parenthesis” to the intersection point. To the right of the intersection, the dashed curve continues above it and approaches the horizontal axis near “alpha minus c divided by 2 phi minus theta”.First-period output and entrant’s profits (high cross-resistance differentiated rival). Source(s): Figure by author