Most economists are concerned about entry barriers. Why is this so important to them?
What will be an ideal response?
Entry barriers enable a firm to earn long-run profits. Furthermore, when there are entry barriers in a market, the industry output does not achieve allocative or productive efficiency, resulting in deadweight losses.
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Which investment caused the Reserve Primary Fund to incur heavy losses?
A) mortgage-backed securities B) real estate investment trusts C) commercial paper issued by Bear Stearns D) commercial paper issued by Lehman Brothers
The level of investment necessary to keep the capital-labor ratio constant is called
A) capital investment. B) break-even investment. C) depreciated investment. D) diluted investment.
The implicit cost incurred by a firm to use its resources to produce its output is the firm's
A) total cost. B) explicit cost. C) opportunity cost. D) accounting cost.
The market price of a transaction always includes all of the costs and benefits associated with the transaction.
Answer the following statement true (T) or false (F)