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Question

In considering its competition, a firm must assess the likelihood of new entrants. Additional producers in the marketplace typically:

A reduce industry capacity and lower prices. Correct Answer Incorrect Answer
B reduce industry capacity and raise prices. Correct Answer Incorrect Answer
C increase industry capacity and raise prices. Correct Answer Incorrect Answer
D increase industry capacity and lower prices. Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Barriers to entry are business practices or conditions that make it difficult for new firms to enter a market.

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