A Barrier to Entry That Significantly Contributes to the Establishment

question 29

Multiple Choice

A barrier to entry that significantly contributes to the establishment of a monopoly would be:

• A) patents.
• B) X-inefficiency.
• C) price-taking behavior.
• D) diseconomies of scale.

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Definitions:

EPS

Earnings per share, a key indicator of a company's profitability, calculated as the company's net profit divided by the number of its outstanding shares.

DFL

Degree of Financial Leverage; a measure that shows how much a company's earnings per share (EPS) are affected by changes in its operating income, indicating the volatility of earnings.

Dividends Per Share

The amount of dividends paid to shareholders, divided by the number of outstanding shares of a company's stock.

Stock Price

The present rate at which a company's stock is bought and sold on the stock exchange.