The Fact That Barriers to Entry Are Low in Competitive

question 38

Multiple Choice

The fact that barriers to entry are low in competitive price-searcher markets means that if current firms are making economic losses,

• A) these losses will remain in the long run because firms will not exit the market.
• B) some current firms will exit the market, causing the demand curves that face the remaining firms to increase.
• C) new firms will enter the market, causing the demand curves that face the existing firms to decrease.
• D) new firms will enter the market, causing no change in the demand curves that face the existing firms in the market.

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Definitions:

Hue

A color or shade, especially as perceived in the spectrum of visible light.

Wavelength

The distance between successive peaks of a wave, typically used in the context of electromagnetic waves like light and radio waves.

Chromatic

Relating to color or the use of color, often used in the context of visual arts or color theory.

Opponent-Process Theory

A psychological model that explains how humans perceive colors as the brain processes signals from the eyes in an antagonistic manner.