Competition is more likely to exist when:
A) There is easy entry into and exit out of industries
B) A government-issued license is required to set up a firm in an industry
C) The government purchases most goods and services
D) Economic power is concentrated among a few large firms

Question

Quizplus · Accepted Answer

Easy entry into and exit out of industries allows for more firms to enter and compete, leading to greater competition. Government-issued licenses (B) can limit the number of firms in an industry and reduce competition. The government purchasing most goods and services (C) would lead to limited competition among suppliers. Economic power concentrated among a few large firms (D) can lead to oligopolistic markets with limited competition.

Competition Is More Likely to Exist When