PRC-3 · Chapter 12 · Question 51 of 69
Which of the following elements would NOT act as a 'barrier to entry' preventing new firms from joining an industry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Perfect consumer knowledge of all market prices
Explanation
Perfect consumer knowledge is a feature of perfect competition, which explicitly has zero barriers to entry. Scale, high costs, and branding are powerful barriers.
More Firm Theory MCQs
- Q53The Law of Diminishing Marginal Returns states that as more variable factors of production are added to a fixed factor:
- Q54Which of the following statements regarding short-run cost curves is mathematically correct?
- Q55When a firm's Average Cost (AC) is visibly rising on a graph, what must definitively be true about its Marginal Cost (MC)?
- Q56For a downward-sloping demand curve, the firm's Marginal Revenue (MR) is strictly greater than zero only if:
- Q57By substituting the Total Revenue (TR) equation into the Average Revenue (AR) formula, we mathematically observe that AR is always equal to: