Capital requirements are a barrier to entry because a new entrant may have to make huge investments in order to participate in the industry.

Question

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Capital requirements are costs that must be incurred by a new entrant in order to start a business in a particular industry. These costs can be high and act as a barrier to entry for new firms that do not have the financial resources to compete with established companies. Therefore, capital requirements are generally seen as a barrier to entry.

Capital Requirements Are a Barrier to Entry Because a New