When New Entrants into a Competitive Market Have Higher Costs

question 83

Multiple Choice

When new entrants into a competitive market have higher costs than existing firms,

• A)accounting profits will be the primary determinant of entry into the market.
• B)sunk costs become an important determinant of the short-run entry strategy.
• C)market price will rise.
• D)long-run supply is constant.

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Definitions:

Organizing

The action or process of arranging or structuring elements in a systematic way, often to achieve efficiency or order.

Similarities

Refers to aspects or qualities that two or more entities have in common, allowing for comparisons or associations between them.

Encoding

The process by which information is converted into a form that allows it to be stored in our memory.

Method of Loci

A mnemonic technique using visualization of familiar spatial environments to enhance the recall of information.