The presence of large sunk costs often serves as a naturally imposed barrier to entry.
Answer the following statement true (T) or false (F)
True
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When economists say that the demand for labor is a derived demand, they mean that it is
A. related to the demand for the product or service labor is producing. B. based on the assumption that workers are trying to maximize their money incomes. C. dependent on government expenditures for public goods and services. D. based on the desire of businesses to exploit labor by paying below equilibrium wage rates.
The automatic budget deficits and budget surpluses that occur in the federal budget over the business cycle
A) destabilize the economy. B) stabilize the economy. C) decrease potential GDP. D) increase potential GDP.
Draw individual demands for caviar for Al, Barbara, Chuck, and Denise where Al's demand is relatively inelastic, Barbara's is elastic, Chuck's is upward sloping, and Denise refuses to eat caviar at any price. Then draw the corresponding market demand
Central bankers with a relatively flat monetary policy reaction curve will:
A. move interest rates more aggressively when inflation rises, leading to less volatility in output. B. move interest rates more aggressively when inflation rises, leading to more volatility in output. C. move interest rates less aggressively when inflation rises, leading to more volatility in output. D. move interest rates less aggressively when inflation rises, leading to less volatility in output.