Why might barriers that prevent the entry of new firms arise?
A) There are freely available production inputs.
B) The government protects some firms from competition.
C) Price exceeds marginal cost.
D) Economies of scale never exist over a substantial range of industry demand.

Question

Quizplus · Accepted Answer

The government can create barriers to entry by protecting certain firms from competition through regulations, subsidies, or licenses. This makes it difficult for new firms to enter the market and compete with the established firms.

Why Might Barriers That Prevent the Entry of New Firms