Which of the following best describes the situation likely to unfold after a new manufacturing firm enters an oligopolistic market?
a. The new firm is initially hampered by economies of scale.
b. The new firm initially has low costs of production that increase over time.
c. The new firm has high sales during its early years followed by a sales decline.
d. The new firm is initially very profitable.
a. The new firm is initially hampered by economies of scale.
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The government proposes a tax on flowers in order to boost its revenue. Consumers will bear no part of this tax if the: a. demand for flowers is perfectly inelastic. b. supply of flowers is perfectly elastic
c. demand for flowers is perfectly elastic. d. demand for flowers is unit elastic.
The effective exchange rate:
a. Is a measure of the weighted-average value of a nation's currency in terms of a basket of other currencies. b. Is needed to translate prices of one currency into prices of another currency. c. Reflects the price of one currency in terms of another currency. d. Takes historic inflation rates into account.