what might be a plausible explanation for the extra entry? give at least two possibilities

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10-02-2020
Business

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what might be a plausible explanation for the extra entry? give at least two possibilities

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youaskianswer youaskianswer · Answer 1 · 2020-02-17T12:20:26+01:00

Over confidence and Excess Entry are the plausible explanation for the extra entry.

Explanation:

An individual who undertakes the organization, creation, ownership of the business with potential growth.

Over confidence causes business entry mistakes and not been directly tested by economic decisions.

The experimental setting with basic features of business entry situations are created. The findings are consistent with the predictions that over confidence leads to excessive business entry.

fichoh fichoh · Answer 2 · 2021-11-09T08:18:19+01:00

Extra entry into free market system often arise when there is excessive influx of businesses owners running to take advantage of a certain market. The entrants beyond the optimal level are the extra entries. These is usually caused by overconfidence and inadequate market forecast.

Overconfidence arises when startups ignore market and economic analysis of the already existing market. As they are overly convinced that the size of the market would be able to accommodate them.

Inadequate economic forecast describes a scenario where appropriate market and feasibility study isn't taken into cognizance before proceeding into an already congested market.

Therefore, overconfidence and market forecast shortfalls often lead to extra entry.

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