Asked by
Ankita Yadav
on Dec 12, 2024
Verified
Which of the following is true for firms that produce in markets where there are no barriers to entry?
A) The firms will always make positive economic profits in the long run.
B) The firms will always make positive economic profits in the short run.
C) The firms will always make zero economic profits in the short run.
D) The firms will always make zero economic profits in the long run.
Barriers to Entry
Economic, procedural, regulatory, or technological factors that obstruct or restrict the ability of new competitors to enter a market.
Economic Profits
The surplus achieved when revenue generated from business activities exceeds both explicit and implicit costs.
Long Run
A period of time in which all factors of production and costs are variable, and firms can adjust all inputs.
- Evaluate the theory of economic earnings and shortfalls in competitive price-seeking markets and their influence on enterprise actions.
- Scrutinize the repercussions of low thresholds for market entry on the structural dynamics of markets and corporate income.
Verified Answer
JD
Learning Objectives
- Evaluate the theory of economic earnings and shortfalls in competitive price-seeking markets and their influence on enterprise actions.
- Scrutinize the repercussions of low thresholds for market entry on the structural dynamics of markets and corporate income.
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