Author Question: What impact would easy entry have on the profitability of ... (Read 55 times)

audie · **on:** Jun 30, 2018

What impact would easy entry have on the profitability of oligopolies?

Question 2

A _____ requires workers to comply with orders from a boss, who need not consult them when making decisions, and to be paid for their cooperation.
a. residual claimant
b. hierarchy
c. shareholder
d. cooperative

maya.nigrin17@yahoo.com · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

When market entry is easy, newcomers will be attracted to the industry whenever excess profits are available. This is likely to lead to the breakdown of tacit agreements of existing firms to hold prices at the current levels. Existing firms may lower their prices to reduce or eliminate the incentives for new firms to enter the market, negatively impacting profitability.

Answer to Question 2

B