What impact would easy entry have on the profitability of oligopolies?
When market entry is easy, newcomers will be attracted to the industry whenever excess profits are available. This is likely to lead to the breakdown of tacit agreements of existing firms to hold prices at the current levels. Existing firms may lower their prices to reduce or eliminate the incentives for new firms to enter the market, negatively impacting profitability.
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In monopolistic competition, free entry and free exit mean that in the long run firms in the industry make zero economic profit
Indicate whether the statement is true or false
IRA stands for Individual Retirement Asset
a. True b. False
An expensive bottle of balsamic vinegar is an example of an ________ good, and an order of lasagna from Bella's Restaurant is an example of a(n) ________ good.
A) experience; experience B) experience; inspection C) inspection; inspection D) experience; credence
In general, the accounting of trade in goods and capital is known as the:
A. balance of trade. B. net capital outflow. C. balance of payments. D. trade surplus.