Abstract: Milgrom-Roberts model and related researches prove that the existence of limit pricing strategy equilibrium under the condition of incomplete information, but they do not show the specific results.Through further research of Milgrom-Roberts limit pricing model, it is pointed out that the strategy equilibrium can exist in an output interval under the condition of incomplete information of different cost type of incumbent to prevent potential competitors. Because of the principle of profit maximization, actually the only strategy equilibrium that the incumbent product optimal output is formed, i.e. profit maximizing output between the equilibrium output interval that is prevented from entering,and the potential competitors do not enter. Due to the potential threat of entry, if the incumbent want to implement the limit pricing strategy successfully, the optimal output can only be equal to or greater than the monopoly output,while profits only less than or equal to the monopoly profit.

Key words: limit pricing, incomplete information, equilibrium output interval, optimal strategy output