A manufacturer of digital music players uses a proprietary file format that is not used by the other firms in the market. This action by the firm may be an example of using a ________ to reduce the number of firms in the market and to maintain a relatively inelastic demand for its products.

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The proprietary file format creates a barrier to entry for other firms who would need to invest in creating a compatible format in order to enter the market. This reduces the number of firms in the market, giving the firm more market power and enabling it to maintain a relatively inelastic demand for its products.

A Manufacturer of Digital Music Players Uses a Proprietary File