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A High Threat of New Entrants Keeps Pricing Pressures on Existing

question 64

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A high threat of new entrants keeps pricing pressures on existing firms, keeping consumers happy and making the industry attractive and profitable.


Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford given their income and the prices of the goods.

Indifference Map

A graphical representation in microeconomics, illustrating different bundles of goods between which a consumer is indifferent, showing preferences.

Total Utility

The overall satisfaction or benefit a consumer receives from consuming a specific quantity of a good or service.

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