ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The sole supplier of a product with no close substitutes
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The ability of a firm to raise its price without losing all sales to rivals
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Restrictions on the entry of new firms into an industry
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A product that is identical across sellers, such as a bushel of wheat
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Detailed explanation-1: -Barriers to entry are the obstacles or hindrances that make it difficult for new companies to enter a given market. These may include technology challenges, government regulations, patents, start-up costs, or education and licensing requirements.
Detailed explanation-2: -Barrier to entry is the high cost or other type of barrier that prevents a business startup from entering a market and competing with other businesses. Barriers to entry are frequently discussed in the context of economics and general market research.
Detailed explanation-3: -There are 4 main types of barriers to entry – legal (patents/licenses), technical (high start-up costs/monopoly/technical knowledge), strategic (predatory pricing/first mover), and brand loyalty.
Detailed explanation-4: -Natural barriers to entry include monopolization and high startup costs, while artificial ones include predatory pricing and patents. Examples of sectors with industry-specific barriers to entry include finance, pharmaceuticals and oil and gas.
Detailed explanation-5: -In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a fixed cost that must be incurred by a new entrant, regardless of production or sales activities, into a market that incumbents do not have or have not had to incur.