Title: The Invisible Hand in Action Flashcards | Quizlet
Headings: The Invisible Hand in Action
The Invisible Hand in Action
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Terms in this set (23)

Content: Barriers to entry
In theories of competition in economics, barriers to entry, are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry - such as government regulation, or a large, established firm taking advantage of economies of scale - or those an individual faces in trying to gain entrance to a profession - such as education or licensing requirements. Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices. Barriers to exit
In economics, barriers to exit are obstacles in the path of a firm which wants to leave a given market or industrial sector. These obstacles often cost the firm financially to leave the market and may prohibit it doing so. If the barriers of exit are significant; a firm may be forced to continue competing in a market, as the costs of leaving may be higher than those incurred if they continue competing in the market
Economic rent
Economic rent is technical terminology used by economists to define one aspect of the price of goods and services. Generally, it designates the difference between the raw costs of everything needed to produce the goods or service and the price. In the analysis, economic rent is determined for each of the factors of production that are used to produce the good or service. Innovation
Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society.