What is the relationship between start-up cost and a competitive market

a. market with high start-up costs are less likely to be perfectly competitive. B) market with high start-up costs are more likely to be perfectly competitive. C) low start-up costs are likely to make a market less competitive. D) there is no consistent relationship between start-up costs and the competitveness of a market.

Question

Social Studies

Whitney Mckenzie

14 May, 16:57

What is the relationship between start-up cost and a competitive market

a. market with high start-up costs are less likely to be perfectly competitive. B) market with high start-up costs are more likely to be perfectly competitive. C) low start-up costs are likely to make a market less competitive. D) there is no consistent relationship between start-up costs and the competitveness of a market.

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Rey Thomas · Answer 1

A high start-up cost means that people will be less likely to make many new start-ups; making start-ups will be more risky. Therefore the companies that already exist will have less competition if the cost of start up is high.

So the correct answer is: a) a market with high start-up costs is less likely to be perfectly competitive.