Which of the following economic forces promotes profitability in the long run?
A. A large number of complementary products
B. Existence of strong barriers to entry.
C. A large number of close substitute products.
D. Both a and b
E. All of the above
Answer: D
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In the range of increasing marginal returns, total product is
a. increasing at a constant rate b. increasing at an increasing rate c. increasing at a decreasing rate d. decreasing at an increasing rate e. decreasing at a decreasing rate
Refer to Figure 8.3. What is the average cost of producing 290 units of output?
A. $9
B. $2,500
C. $8.62
D. $7.77
Economists believed that the U.S. economy had a (n) ____ in 2006 and 2007
a. mild recession b. small recessionary gap c. small inflationary gap d. deflationary gap
Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000 . He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%. Abdul's annual explicit cost of capital is
a. $8,000. b. $4,000. c. $2,000. d. $1,000.