Asked by Joshua Najera on Jul 19, 2024
Verified
The greater are the barriers to entry into an industry
A) the more elastic will be the demand curves for existing firms.
B) the more likely that existing firms will enjoy large profits in the long run.
C) the lower will be short-run profits.
D) the lower will be the average cost curves of existing firms.
Barriers To Entry
Factors that make it difficult for new competitors to enter an industry, often protecting existing companies from competition.
Demand Curves
A graphical representation used in economics to show the relationship between the price of a product and the quantity of the product that consumers are willing and able to purchase at various prices.
Long Run
When all costs become variable costs and firms can enter or leave the industry.
- Comprehend the factors that create barriers to entry in an industry.
Verified Answer
AB
allproducts businessJul 26, 2024
Final Answer :
B
Explanation :
Higher barriers to entry mean it is harder for new firms to enter the market and compete with existing firms. This reduces the threat of new competition and allows existing firms to maintain their market power, leading to higher profits in the long run.
Learning Objectives
- Comprehend the factors that create barriers to entry in an industry.