An article in The Economist reported that prices of CDs in Britain was much higher than prices in the United States or other European countries.There were only a few major companies, and a report from a Parliament committee said there was no serious price competition.The best explanation for this is that
A)the industry was a contestable market.
B)there were entry barriers in production and distribution of CDs.
C)firms were avoiding profit opportunities.
D)there were substantial differentiation of product.

Question

Quizplus · Accepted Answer

The presence of few major companies and lack of serious price competition suggests that there are barriers to entry in the production and distribution of CDs, resulting in higher prices.

An Article in the Economist Reported That Prices of CDs