An incumbent usually charges a higher price than a new entrant does. Which of the following is a plausible reason for this observation?
A. An incumbent usually has a bigger bureaucratic body than a new entrant does and hence has a higher marginal cost.
B. Consumers are risk averse, hence new firms charge lower prices to attract customers.
C. The incumbent is ignorant of the new entrant; hence it is still charging the old high price.
D. All of the statements associated with this question are correct.