When There Are Significant Barriers to Entry and There Are

question 16

Multiple Choice

When there are significant barriers to entry and there are few firms in the industry

• A)economic profit will continue for the firms in the industry.
• B)economic profit will go to zero.
• C)normal profit will be garnered by the firms.
• D)at least one will exit until the economic profit disappears.

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Definitions:

TC

Typically refers to "Total Cost," which is the complete cost of production including both fixed and variable costs.

Average Fixed Costs

The fixed costs of production (such as rent and salaries) divided by the quantity of output produced.

Average Total Costs

The overall expense of creating goods divided by the number of items produced.

Output

The quantity of goods or services produced by a firm, industry, or economy within a specified period.