Author Question: Refer to Table 2-17. What is James's opportunity cost of making a tricycle? A) 2 tricycles B) 3/4 ... (Read 127 times)

ssal · **on:** Jun 29, 2018

Refer to Table 2-17. What is James's opportunity cost of making a tricycle?

A) 2 tricycles B) 3/4 of a wagon C) 1/2 of a wagon D) 1/2 of a tricycle

Question 2

What triggers entry in a competitive market? Describe the process that ends further entry.

What will be an ideal response?

ASDFGJLO · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

When firms in a competitive market make an economic profit, the economic profit serves as an inducement to other firms to enter the market. As the other firms enter, the supply increases and the price falls. The fall in the price eventually eliminates the economic profit, at which time entry stops.