When ____ can occur, no firm can get away with anything.

Question

Quizplus · Accepted Answer

Free entry refers to the ability of new firms to easily enter an industry and compete with existing firms. When this exists, firms cannot engage in monopolistic behavior or earn high economic profits because new competitors will quickly enter the market and drive down prices. Therefore, firms are forced to operate efficiently and offer competitive prices and quality in order to remain in the market.

When ____ Can Occur, No Firm Can Get Away with Anything