The government requires the steel industry to adopt new eco-friendly m

The government requires the steel industry to adopt new eco-friendly machines, which cannot be used in other industries. If the machines are very expensive and the capital market does not work efficiently, then

A) entrants are encouraged to enter the market and adopt the new machines.
B) firms can easily leave the steel industry without loss.
C) entrants are discouraged by the new requirements.
D) None of the above.

ANSWER

C