When there are barriers to entry, a profit-maximizing firm already in the industry can charge any price it wants, even in the long run.

Name: When there are barriers to entry, a profit-maximizing firm already in the industry can charge any price it wants, even in the long run.
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Question

Quizplus · Accepted Answer

Barriers to entry can limit competition, but a firm cannot charge any price it wants indefinitely due to potential regulatory intervention, consumer demand elasticity, and the threat of future competition or substitutes.

When There Are Barriers to Entry, a Profit-Maximizing Firm Already