In Discussions of Barriers to Entry, What Is Meant by the Term

question 136

Multiple Choice

In discussions of barriers to entry, what is meant by the term "virtuous cycle"?

• A)A virtuous cycle refers to successful research and development that leads to information that is used to develop other new products.
• B)A virtuous cycle refers to a firm using the profits from a monopoly in one market to establish a monopoly in another market.
• C)A virtuous cycle refers to the situation where the pursuit of self-interest in establishing an entry barrier leads to an increase in social welfare (the "invisible hand").
• D)A virtuous cycle refers to a situation where if a firm can attract enough customers initially, it can attract additional customers because its product's value has been increased by other customers using it, which attracts even more customers.

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Definitions:

Problem Solving

The process of identifying a challenge or obstacle and developing methods or strategies to overcome it.

Symbolic

Relating to symbols or the use of symbols to represent ideas or qualities.

Recognition

The act of acknowledging or rewarding the achievements or efforts of individuals or groups, often used as a motivational tool.

Managers Share

The portion of responsibility or information that managers possess and often distribute among team members to achieve organizational goals.