Which of the following can serve as a barrier to entry?
A) legal restrictions
B) specialization and division of labour
C) shortage of resources
D) the law of supply

Question

Quizplus · Accepted Answer

Legal restrictions can create barriers to entry that prevent new firms from entering a market, such as licenses, patents, and regulations. Specialization and division of labor (B) can actually facilitate entry by allowing new firms to focus on niche markets or specific functions within a larger industry. Shortage of resources (C) generally does not serve as a barrier to entry, as new firms may simply find alternative means of obtaining the necessary resources. The law of supply (D) is a general economic principle that describes the relationship between price and quantity supplied, but it is not a barrier to entry.

Which of the Following Can Serve as a Barrier to Entry