An article in The Economist reported that prices of CDs in Britain were 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 was substantial differentiation of products.

Question

Quizplus · Accepted Answer

The presence of only a few major companies suggests entry barriers in production and distribution of CDs, which limits competition and allows for higher prices.

An Article in the Economist Reported That Prices of CDs