Barriers to entry are characteristics of a particular market:
A) in which the industry can make it so difficult for entry that only a few firms can do so, and this leads to monopoly power.
B) that block new firms from entering.
C) which include economies of scale, location advantages, and high sunk costs.
D) all of the above are true.

Question

Quizplus · Accepted Answer

Barriers to entry refer to the characteristics of a particular market that make it difficult or even impossible for new firms to enter and compete with existing ones. These barriers can include economies of scale, location advantages, regulatory barriers, high sunk costs, brand identity, and so on. When these barriers are high, only a few firms can enter the market and dominate it, leading to monopoly power. Therefore, all of the above statements are true and describe the nature of barriers to entry.

Barriers to Entry Are Characteristics of a Particular Market