If barriers to entry are high and products are somewhat differentiated, then a.economic profit might be sustainable. b.the industry is probably monopolistically competitive. c.the industry is probably a differentiated monopsony. d.the industry is probably perfectly competitive.

Respuesta :

If barriers to entry are high and products are somewhat differentiated, then the (A) economic profit might be sustainable.

What are barriers to entry?

  • In economics, barriers to entry are constraints that make it difficult for a corporation to enter a specific market.
  • They may occur spontaneously as a result of market dynamics, or they may be imposed artificially by enterprises already operating in the market or by the government.

What are differentiated products?

  • A company's product is distinguished if it is noticeably distinct from competitors' products.
  • If the product is unique, the manufacturer can argue that it is superior.
  • If the product is superior, the corporation can charge a higher price for it.

Since there are barriers to entry but still the product has a unique image in the market then the economic profit of the firm will be sustainable in the long run.

Therefore, if barriers to entry are high and products are somewhat differentiated, then the (A) economic profit might be sustainable.

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