The presence of large sunk costs often serves as a naturally imposed barrier to entry.

Name: The presence of large sunk costs often serves as a naturally imposed barrier to entry.
Brand: Quizplus
Rating: 4.8 (37 reviews)

Question

Quizplus · Accepted Answer

Sunk costs refer to the costs that have already been incurred and cannot be recovered. These costs act as a barrier to entry for new firms as they have to bear these costs to enter the market. Therefore, the presence of large sunk costs often serves as a naturally imposed barrier to entry.

The Presence of Large Sunk Costs Often Serves as a Naturally