Which of the following statements about barriers to entry into a market is true?
a. Abnormally high profits will attract new firms into the market.
b. Entry of new firms into a market with abnormally high profits causes prices to decline.
c. Economies of scale combined with the size of the market expand competition.
d. Barriers may block entry even if the firm or firms currently in the market are earning profits.
d. Barriers may block entry even if the firm or firms currently in the market are earning profits.
In markets with significant barriers to entry, it is not true that abnormally high profits will attract new firms, and that this entry of new firms will eventually cause the price to decline so that surviving firms earn only a normal level of profit in the long run.
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The unregulated, single-price monopoly shown in the figure above will produce where its demand
A) equals its MC curve. B) equals its ATC curve. C) is inelastic. D) is elastic.
If you buy a book of U.S. postage stamps to use to mail love letters to your sweetheart, the purchase is considered part of:
A. C. B. I. C. G. D. X.
Moral hazard occurs when one side of an economic relationship:
A. takes costly actions that the other side of the relationship cannot observe. B. takes actions that is contrary to the religious beliefs of the other side of the economic relationship. C. takes actions that the other side of the relationship enjoys doing. D. takes actions that the other side of the relationship cannot force them to do.
A durable good is product that
A) holds up well under abuse. B) has had the same design over a long period of time. C) is purchased only once. D) is usable over a long period of time.