How would the introduction of legal or technical barriers to entry affect the long-run equilibrium in a perfectly competitive market?
What will be an ideal response?
In a perfectly competitive market, the lack of entry barriers ensures that the market price is ultimately driven down to minimum average cost in the long run. However, if there are barriers to entry in a market, new firms will find it difficult to enter, reducing the downward pressure on price. This will allow the existing firms to earn economic profits in the long run. As long as these barriers exist, firms can sell goods at a price that is above average total cost.
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Autarkia imports oil and natural gas and exports food grains to the rest of the world. Based on this information, we can conclude that Autarkia is a(n) ________ economy
A) closed B) command C) open D) communist
Which of the following was an outcome of uncoordinated oil drilling in Huntington Beach, California?
a. The entire oil present underground had been extracted within few years. b. Underground oil pressure had increased due to excessive drilling leading to an oil spill into the adjacent sea. c. A majority of the oil could not be drilled out as low underground pressure prevented oil from reaching the surface. d. The oil belt suffered frequent earthquakes as excessive drilling had loosened the soil bonding.
Which of the following members of the European Union has NOT adopted the euro?
A) Denmark B) Estonia C) Germany D) Greece
If the slope of the consumption schedule is 0.75, then the slope of the saving schedule is:
A. 0.25 B. 0.75 C. 1.25 D. Cannot be determined from the data