In Which of the Following Market Structures Does Free Entry

question 45

Multiple Choice

In which of the following market structures does free entry and exit play an important role in the long-run equilibrium outcome?

• A) (i) only
• B) (i) and (ii) only
• C) (ii) and (iii) only
• D) (i), (ii), and (iii)

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Definitions:

Under Consumption

A situation where consumers are spending less than what is needed to drive economic growth due to various factors like low income or high savings.

Sunspot Theory

A theory in economics that suggests that economic cycles might be driven by psychological factors or extrinsic shocks, rather than fundamentals alone.

Psychological

Pertaining to the mind or mental processes, often emphasizing the influence on behavior, perception, and emotion.

Endogenous

Refers to factors or processes that originate from within a system or model.