Which of the following statements applies to hysteresis?
A) Hysteresis occurs when there are both high entry and exit costs.
B) Hysteresis refers to the hysteria of a currency crisis
C) Hysteresis is a consequence of the intrinsic value of a "now or never" proposition.
D) Three of the above
E) Two of the above

Question

Quizplus · Accepted Answer

Hysteresis occurs when there are both high entry and exit costs, meaning that it is difficult for a firm or industry to enter or exit a market due to significant costs associated with these actions. This can lead to a lag in response to changing market conditions, which can have negative effects on efficiency and competitiveness. The other statements are not accurate descriptions of hysteresis.

Which of the Following Statements Applies to Hysteresis