When Economists Talk About a Barrier to Entry, They Are

question 251

Multiple Choice

When economists talk about a barrier to entry, they are referring to

• A) a factor that makes it difficult for potential competitors to enter a market.
• B) the opportunity cost of equity capital that is incurred by a firm producing at minimum total cost.
• C) the downward-sloping portion of the long-run average total cost curve.
• D) the declining output experienced as additional units of a variable input are used with a given amount of a fixed input.

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Definitions:

Beginning Inventory

The value of a company's inventory at the start of an accounting period, used in calculating cost of goods sold during the period.

Inventory Value

The total cost or market value of all the goods held by a company that are ready or will be ready for sale.

FIFO Inventory

An accounting method where the first items added to inventory are the first ones considered sold.

Net Realizable Value

The estimated selling price of goods minus the cost of completion and the costs necessary to make the sale.