Even when entry barriers are very high,new firms may still enter an industry if they perceive that the benefits outweigh the costs of entry.

Question

Quizplus · Accepted Answer

Despite high entry barriers, there may be some new firms that perceive potential benefits (such as high profits or market share) that outweigh the costs and risks associated with entry. Therefore, they may still choose to enter the industry. This is more likely if the existing firms are not meeting the full potential of the market or if there are technological or regulatory changes that create new opportunities.

Even When Entry Barriers Are Very High,new Firms May Still