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Gissela Perdomo
on Oct 27, 2024

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Large barriers to entry in the gas station business explain why the two only gas stations in a small town:

A) can earn an economic profit in the long run.
B) must produce at the minimum average total cost in the long run.
C) have no fixed costs in the long run.
D) must produce a level of output such that MR = MC to maximize their profit.

Barriers to Entry

Factors that prevent or hinder companies from entering a particular market or industry.

Gas Station

A commercial outlet that offers gasoline and motor oil for automobiles.

Economic Profit

Profits earned by a firm after accounting for both explicit costs and opportunity costs.

  • Comprehend the idea and importance of entry obstacles in shaping market configurations.
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Adama CayenneOct 27, 2024
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