Which of the Following Creates an Incentive for New Firms

question 3

Multiple Choice

Which of the following creates an incentive for new firms to enter an industry to obtain a share of the profits, thus driving the price down and inducing more goods and services to be produced?

• A) Excess costs
• B) Excess profits
• C) Excess supply
• D) Excess demand

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Definitions:

Era of Downsizing

A period characterized by a significant reduction in the workforce of organizations to cut costs and improve efficiency.

Limited Power

A condition where an entity's authority or capacity to act and influence is restricted by external factors or internal regulations.

Cognitive Ability

The mental capacity to reason, remember, understand, solve problems, and make decisions.

Leadership Trait

Characteristic qualities or features exhibited by effective leaders, such as decisiveness, integrity, and the ability to inspire others.