객관식
In a competitive market, how can it be beneficial for a firm to be the first to innovate?
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3. The Market Forces of Supply and Demand
Competitive Markets
객관식
In the context of competitive markets, what is the result of low barriers to entry in the airline industry?
A
Increased competition among airlines, leading to lower prices for consumers.
B
Government regulation preventing new airlines from entering the market.
C
Decreased number of airlines due to high startup costs.
D
A single airline dominating the market and setting higher prices.
검증된 단계별 안내1
Understand the concept of barriers to entry: These are obstacles that make it difficult for new firms to enter a market. Low barriers mean it is relatively easy for new firms to start operating.
Recall the characteristics of a competitive market: Many firms can enter and exit freely, leading to competition that drives prices toward marginal cost.
Analyze the airline industry with low barriers to entry: If new airlines can enter easily, more firms will join the market, increasing competition.
Consider the effect of increased competition: More airlines competing typically results in lower prices and better services for consumers.
Contrast this with high barriers to entry scenarios: High startup costs or regulations limit new entrants, reducing competition and potentially allowing existing firms to raise prices.
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