Barriers that prevent the entry of new firms may arise because:

Question

Quizplus · Accepted Answer

Choice (a) is a common barrier to entry, as larger firms may be able to achieve lower average costs and therefore have a pricing advantage over new entrants. Choice (c) refers to government policies that protect existing firms, such as import tariffs or regulations that make it difficult for new firms to enter the market. The combination of economies of scale and government protection makes it especially difficult for new firms to enter and compete, creating significant barriers to entry.

Barriers That Prevent the Entry of New Firms May Arise