Answer :
The outcome that should NOT ever happen in the context of an incumbent and a potential entrant is:
a low-cost incumbent pretending to be a high-cost producer.In a market with an incumbent and a potential entrant, the incumbents typically have an advantage due to their existing market presence, established customer base, and possibly lower costs. The potential entrant may be considering entering the market if it believes it can compete effectively.The options a, b, and c involve the incumbent acting truthfully or in line with their actual cost structure:a. A high-cost incumbent pretending to be a low-cost producer: This scenario would involve the high-cost incumbent trying to misrepresent its costs to compete with the potential entrant. While it may be considered deceptive, it is a strategic action that could be taken in a competitive market.b. A high-cost incumbent acting as if they are a high-cost producer: This option describes the incumbent's behavior being consistent with its actual high-cost structure. It is an expected outcome if the incumbent is unable to lower its costs and the potential entrant perceives an opportunity to enter the market.c. A low-cost incumbent acting as if they are a low-cost producer:
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