In a Market System, as One Industry Expands While Another

question 207

Multiple Choice

In a market system, as one industry expands while another contracts, resources will flow

• A) away from the expanding industry toward the contracting one.
• B) across industries, driven by the changes in resource prices paid by firms.
• C) toward the industry where the product demand is declining.
• D) because resource allocation will have to equalize between the two industries.

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Definitions:

Unique Product

A product that has distinct features or attributes making it different from others in the market.

Blocked Entry

A situation where new firms are unable to enter an industry due to high barriers to entry, such as high start-up costs or stringent regulations.

Oligopolistic Industry

A market structure characterized by a small number of large firms dominating the industry, with significant barriers to entry for new competitors.

Retail Grocery

A business sector focused on selling food and other household items directly to consumers.