Asked by
Cecilia Smith
on Dec 12, 2024Verified
When entry barriers are low, firms in a competitive price-searcher market
A) can expect many new rivals to enter regardless of current profitability.
B) can expect competing firms to enter the market if the activity is profitable.
C) can never earn economic profit.
D) will always be able to earn economic profit.
Entry Barriers
Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, and established brand loyalty.
Competitive Price-searcher Market
A market structure where firms have some control over the pricing of their products because their products are differentiated, but there is intense competition due to low entry barriers.
Economic Profit
The total revenue of a business minus both explicit and implicit costs.
- Analyze the impact of entry barriers and product variation on competitive dynamics in the market and the profitability of businesses.
Verified Answer
JC
Learning Objectives
- Analyze the impact of entry barriers and product variation on competitive dynamics in the market and the profitability of businesses.