ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A market with perfect competition features zero barriers to entry. 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.

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: -Freedom of Entry and Exit In a perfect competition, every seller has the choice to enter or exit the industry. There are no barriers to their entry and exit. This characteristic ensures that there are no abnormal profits and losses in the long run.

Detailed explanation-4: -Perfectly competitive markets have no barriers to entry and exit; a firm can freely enter or leave an industry based on its perception of the market’s profitability. In a monopolistic competitive market there are few barriers to entry and exit, but still more than in a perfectly competitive market.