If there are barriers to entry into a market, it is possible for the existing firm(s) to earn positive economic profits. All of the following explain this except:
A) new firms cannot enter to take advantage of the profits.
B) resource immobility.
C) it is possible for a firm in this situation to charge any price it wants and thus preclude anyone else from entering.
D) competition does not erode profits the way it would under perfect competition.
C
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Perfect competition exists in a market if
A) there are many firms producing an identical product. B) there are many firms producing a similar product, each of which may have unique features. C) the firm is protected by a barrier to entry. D) the firm is always at the break-even point where it is earning only a normal profit.
The conflict between the Vice President of Marketing and her sales staff arises because
a. the sales staff are too willing to offer discounts b. the Vice President does not want to negotiate aggressively enough c. the sales staff want to negotiate too aggressively d. the Vice President is more willing to offer discounts to make the sale
An argument for tariffs that has some validity is
a. the infant-industry argument. b. the leveling-the-playing-field argument. c. the retaining-money-at-home argument. d. All of these.
An oligopolistic firm that is deciding the price to charge, the output to produce, or the quality of product to offer, must consider
a. the regulatory price limits that are always present with oligopoly. b. the potential reactions of rivals in the market. c. the fact that per-unit costs will usually increase as the scale of production increases. d. that entry barriers into oligopolistic markets are low.