Barriers to Entry Are Forces That

question 1

Multiple Choice

Barriers to entry are forces that:

• A)limit consumers from purchasing new products.
• B)limit new firms from joining an industry.
• C)promote a more efficient allocation of resources across the economy.
• D)limit the government from intervening in markets.

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Definitions:

Principal

This term refers to the original sum of money borrowed in a loan or the initial amount of investment before earnings or losses.

Expansionary Gap

A situation where the output of an economy is greater than the full employment output, often leading to inflation.

Long-Run Equilibrium

A state in which all factors of production are used efficiently, market supply and demand are balanced, and there is no tendency for change in the economic variables.