ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In perfectly competitive markets, barriers to entry are low. That means, when firms are earning economic profits, competing firms seek that profit and enter the market in the long run. When firms enter the market, prices fall and economic profit goes to zero.

Detailed explanation-2: -Barriers to entry are important considerations for any entrepreneur during the beginning stages of exploring a business concept. The industry with the lowest barriers to entry is Professional, Scientific and Technical Services, thanks partly to low startup costs and the relative ease of operating without employees.

Detailed explanation-3: -Under perfect competition firms are unable to control prices, and produce similar or identical goods. This means that firms cannot operate strategic barriers to entry. Perfect competition implies no economies of scale; this means that structural barriers to entry are also not possible under perfect competition.

Detailed explanation-4: -Examples of low barriers to entry include establishing a brand in a small marketplace that does not have a lot of competition and the need to have buyers switch to a new brand that does not involve a lot of work or hassle.