Which of the Following Conditions Is Most Essential If a Firm

question 99

Multiple Choice

Which of the following conditions is most essential if a firm is going to earn long-run economic profits?

• A) an inelastic market demand for the product
• B) a small number of firms, even though competitors are free to enter the industry
• C) a differentiated product
• D) restrictions that limit the entry of potential competitors into the industry

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Definitions:

Unreasonable Zoning

Zoning regulations or decisions that are arbitrary, capricious, or unreasonable in restricting the use of land, potentially leading to legal challenges.

Constructive Taking

A situation where government regulation of property is so restrictive that it effectively amounts to a taking under the Fifth Amendment, requiring just compensation.

Government

The organization, machinery, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.

Restrictive Covenants

Clauses in a contract or agreement that limit certain actions or activities to protect business interests, such as non-compete or confidentiality agreements.