Suppose That the Normal Rate of Return in the Inkjet

question 31

Multiple Choice

Suppose that the normal rate of return in the inkjet printer industry is 10% and the return being earned by firms in this industry equals exactly 5%. Which of the following is likely to follow from this scenario?

• A) Firms will collude to keep competition out.
• B) New firms will want to enter the industry.
• C) Firms will want to leave the industry.
• D) The normal rate of return will fall to 5% in the long run.

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Definitions:

Closely Related

Items or concepts that are very similar or connected in nature or function.

Same Customer Group

Targets the identical demographic or market segment, focusing on consumers with similar needs, interests, or characteristics.

Product Lines

A group of related products marketed under a single brand name by a company, often serving a similar function or targeted at a specific market segment.

Broad Product Lines

A strategy where a company offers a wide range of products under its brand, catering to diverse customer needs and preferences.