Which of the following industries is most likely to exhibit the characteristic of free entry?

• A. Pharmaceutical production
• B. Commercial airline manufacturing
• C. Electric utility providers
• D. Local lawn care services

Answer: (D)

Verified step by step guidance

1. Understand the concept of free entry: Free entry means that new firms can enter the industry without significant barriers such as high startup costs, regulatory restrictions, or strong incumbent advantages.
2. Analyze each industry for entry barriers: Pharmaceutical production typically requires large R&D investments and regulatory approval, creating high entry barriers.
3. Consider commercial airline manufacturing: This industry involves massive capital investment, complex technology, and long development times, which are significant barriers to entry.
4. Evaluate electric utility providers: These are often natural monopolies with high infrastructure costs and regulatory controls, limiting free entry.
5. Look at local lawn care services: This industry usually has low startup costs, minimal regulation, and many small competitors, making it the most likely to exhibit free entry.