alleryWhy does strict licensing in a planned economy limit competition?
AIt lowers all prices
BIt creates new foreign trade
CIt keeps many firms out
DIt removes state ownership
Answer & Solution
Correct answer: C. It keeps many firms out
Strict permits and licences stop many firms from entering the market, which reduces competition.
Keep practising Building Blocks in Economics
Browse all Building Blocks in Economics questions for CBSE Class 9, or explore more Social Science topics.
Related questions
What is one way entrepreneurs can exploit opportunities?What does bootstrapping try to minimise?Which two thinkers defined entrepreneurship in terms of risk-taking?What do venture capital firms take for seed money?What do revenue-based financing lenders receive for growth capital?Which activity describes startup investing?What is an internal startup in a large company?When is a startup usually in its seed round?