Economics 9708 · AS & A Level · 7.6

7.6 — practice question

What is the most likely explanation for why barriers to entry can cause x-inefficiency?

  • AThe firm does not account for any external benefits.
  • BThe firm has no incentive to cut its costs of production.
  • CThe firm’s price is set higher than its average costs.
  • DThe firm’s price is set higher than its marginal costs.

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