When Entry and Exit Barriers Are High,________

question 44

Multiple Choice

When entry and exit barriers are high,________.

• A) profit potential is high, but firms face more risk because poorer-performing firms stay in and fight it out
• B) firms easily enter and leave the industry, and returns are stable and low
• C) few new firms can enter the industry, and poorly performing firms can easily exit
• D) firms enter during good times but find it hard to leave during bad times, resulting in chronic overcapacity and depressed earnings for all
• E) none of the above