📚 Learning Guide
Economic Profit and Oligopoly
hard

Economic profit : Average Total Cost :: Market Entry : ?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Decreased competition

B

Strategic pricing

C

Increased market share

D

Consumer surplus

Understanding the Answer

Let's break down why this is correct

Answer

Economic profit is the extra money a company makes after covering all its costs, including opportunity costs. Similarly, market entry refers to the process of a new company starting to sell goods or services in a market. Just as economic profit can attract more businesses to enter a market, the analogy suggests that market entry relates to "Economic Loss. " When a company faces economic losses, it may discourage new businesses from entering the market. For example, if a company in an oligopoly is losing money, it signals to others that the market may not be profitable, leading them to stay out.

Detailed Explanation

When a new company enters a market, it often uses strategic pricing. Other options are incorrect because Some might think that entering a market means less competition; It's easy to think that entering a market automatically means gaining market share.

Key Concepts

Economic Profit
Oligopoly Market Structure
Market Dynamics
Topic

Economic Profit and Oligopoly

Difficulty

hard level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.