Question

1)Which of the following statements is false?

Group of answer choices

A. Sunk costs are an important factor in determining entry into a market because these costs may be quite high.

C. Sunk costs are not relevant to the firm’s decisions after it has entered the market.

D. Sunk costs, although likely to be important in guiding the decisions of firms, are unlikely to be influential on market structure

B. Sunk costs are an important factor in determining entry into a market because sunk costs cannot be recouped.

2)Contestable markets have ______ barriers to entry and ______ sunk costs

Group of answer choices

C. low; high

B. high; low

D. low; low

A. high; high

3)The causes of high concentration in an industry are many, but one is _______________.

Group of answer choices

A. economies of scale

B. diseconomies of scale

C. less than minimum efficient scale

D. large firms cannot coexist

4) Which of the following statements is true?

Group of answer choices

C. Patents and copyrights are important barriers to entry in both oligopoly and perfect competition.

B. The need for hard work is a barrier to entry in and of itself.

D. Any circumstance that prevents a firm from competing on an equal footing with existing firms is a barrier to entry.

A. Every effort or expense that a firm must undertake to enter an industry is a barrier to entry.

Answer 1

1)Sunk costs are not relevant to the firm’s decisions after it has entered the market.

Sunk costs, although likely to be important in guiding the decisions of firms, are unlikely to be influential on market structure.

Both are false

2)low entry barriers and low sunk cost ( sunk cost is a barrier to entry)

3)high concentration means few firms have very high market share.

So one reason is economies of scale

4)Every effort or expense that a firm must undertake to enter an industry is a barrier to entry.

Any circumstance that prevents a firm from competing on an equal footing with existing firms is a barrier to entry.

Both are true statement