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    Question

    In considering its competition, a firm must assess the likelihood of new entrants. Additional producers in the marketplace typically:

    A reduce industry capacity and lower prices. Correct Answer Incorrect Answer
    B reduce industry capacity and raise prices. Correct Answer Incorrect Answer
    C increase industry capacity and raise prices. Correct Answer Incorrect Answer
    D increase industry capacity and lower prices. Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Barriers to entry are business practices or conditions that make it difficult for new firms to enter a market.

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