Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

14. Oligopoly

Characteristics of Oligopoly

Microeconomics

14. Oligopoly

Characteristics of Oligopoly

Previous problemNext problem

Struggling with Microeconomics?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

A major threat to long term profits exists when barriers to entry into an industry are high

True

False

None of the above

Previous problemNext problem

Verified step by step guidance

Understand the concept of barriers to entry: Barriers to entry are obstacles that make it difficult for new firms to enter an industry. These can include high startup costs, strict regulations, strong brand loyalty, or access to technology.

Consider the impact of high barriers to entry on competition: High barriers to entry typically reduce the number of firms that can enter the market, leading to less competition.

Analyze the relationship between competition and profits: With fewer competitors, existing firms can maintain higher prices and enjoy greater market power, potentially leading to higher long-term profits.

Evaluate the statement: The statement suggests that high barriers to entry are a threat to long-term profits. However, high barriers often protect existing firms from new competition, which can actually safeguard their profits.

Conclude the analysis: Based on the understanding that high barriers to entry can protect existing firms from competition, the statement that they are a threat to long-term profits is false.