An entry barrier exists when firms in an industry charge the lowest price possible for their products.

Question

Quizplus · Accepted Answer

An entry barrier is a condition that prevents new firms from entering an industry. It could be high start-up costs, regulatory restrictions, economies of scale, or other factors. The price level charged by existing firms in an industry does not create an entry barrier. In fact, low prices could attract new entrants to the industry, which may lead to increased competition and lower profitability for existing firms.

An Entry Barrier Exists When Firms in an Industry Charge