Barriers to Entry Refer to

question 131

Multiple Choice

Barriers to entry refer to

• A)pure competition from many new firms.
• B)the likelihood of new entrants.
• C)monopolistic competition.
• D)business practices that make it difficult for new firms to enter the market.
• E)a megopoly.

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Definitions:

Short Run

A time period in economics during which at least one factor of production is fixed, limiting the ability of the business to adjust to market changes fully.

Monopolistically Competitive Firm

A type of firm in a market structure where many companies sell products that are similar but not identical, and each has some control over its price.

Monopolistic Competition

A market structure characterized by the presence of several firms that sell similar, but slightly differentiated, products and services where each has some control over its prices.

Zero Economic Profits

A situation in perfectly competitive markets where firms earn just enough revenue to cover their total operating costs, leaving no supernormal profit.