Shelly Brunner owns a sports-themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years ago when lots in the area were selling for $50,000. Shelly knows that several potential competitors have looked at bare lots near his business but haven't been willing to pay the asking prices, which are as high as $500,000. Which of the six major sources of barriers to entry is causing a disincentive for new firms to enter Shelly's industry?

Question

Quizplus · Accepted Answer

Shelly's cost advantage comes from owning the land at a much lower price than current market rates, which is independent of the size of her business. This creates a barrier for new entrants who would face significantly higher costs for land acquisition.

Shelly Brunner Owns a Sports-Themed Restaurant Which Is Located in an Upscale