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:

Aquifer

An underground layer of water-bearing permeable rock, rock fractures, or unconsolidated materials (gravel, sand, silt) from which groundwater can be extracted.

Karst Topography

A landscape formed from the dissolution of soluble rocks such as limestone, characterized by sinkholes, caves, and underground streams.

Limestone Pillars

Natural columns made of limestone, often formed in karst landscapes through the process of dissolution.

Sinkholes

Depressions or holes in the ground caused by the collapse of a surface layer, often resulting from the dissolution of limestone beneath.