Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 24, Problem 1CQ
To determine
Effect of barriers to entry to attain the long run profit.
Expert Solution & Answer
Explanation of Solution
Barriers to entry are crucial for the existence of long run profit. It is because a firm can make profit in the short run. However, if there are no barriers to entry, other firms will enter into the market to capture the profit and they increase the supply of products. The
Economics Concept Introduction
Barriers to entry: Creating the obstacles like high startup cost and other barriers to prevent the entrance of new firm in the market.
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Chapter 24 Solutions
Economics: Private and Public Choice (MindTap Course List)
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