ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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new firms are welcome into the market
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it is easy to get into the market
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any factor that makes it difficult for a new firm to enter a market
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None of the above
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Detailed explanation-1: -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.
Detailed explanation-2: -Common barriers to entry include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs. Other barriers include the need for new companies to obtain licenses or regulatory clearance before operation.
Detailed explanation-3: -barriers to entry, in economics, obstacles that make it difficult for a firm to enter a given market. They may arise naturally because of the characteristics of the market, or they may be artificially imposed by firms already operating in the market or by the government.
Detailed explanation-4: -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-5: -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.