If there are barriers to entry into a market, it is possible for the existing firm(s) to earn positive economic profits. All of the following explain this except:
A) new firms cannot enter to take advantage of the profits.
B) resource immobility.
C) it is possible for a firm in this situation to charge any price it wants and thus preclude anyone else from entering.
D) competition does not erode profits the way it would under perfect competition.
C
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Refer to Figure 7.1. Suppose the city passes an ordinance banning loud music, and this directly impacts Angus's legal ability to play his bagpipes. The payoffs in the lower-right cell of the payoff matrix would change to
A) 0, 0. B) 550, 100. C) 100, 550. D) The payoffs would not change.
The learning curve describes the ________ relationship between ________ and ________
A) inverse; unit cost; cumulative output B) direct; unit cost; cumulative output C) inverse; education; annual income D) direct; education; annual income E) direct; education; labor productivity