High barriers to entry protect the market power of existing firms and discourage the formation of firms which:
A)invest heavily in research and development activities.
B)use illegal procedures to capture the market.
C)are inefficiently small and cannot realize economies of scale.
D)are large enough to dominate the existing firms.

Question

Quizplus · Accepted Answer

High barriers to entry make it difficult for small firms to enter the market, which means they cannot achieve economies of scale. This suggests that the inefficiently small firms (C) are unlikely to enter the market, while the other options are not relevant or desirable.

High Barriers to Entry Protect the Market Power of Existing