An insurmountable barrier to entry can enable a firm to produce a quantity at which its _______ exceeds its ______in the long run.

Question

Quizplus · Accepted Answer

An insurmountable barrier to entry would mean that there are no other firms entering the market, therefore the firm can set the price at a level that exceeds its average total cost, allowing it to earn profits in the long run. The correct choice is D, as price exceeds the average total cost in this scenario.

An Insurmountable Barrier to Entry Can Enable a Firm to Produce