An obstacle that prohibits new firms from entering an industry defines
A)economies of scale.
B)barriers to entry.
C)monopoly power.
D)natural monopoly.

Question

Quizplus · Accepted Answer

Barriers to entry refer to factors that make it difficult for new firms to enter an industry and compete with existing firms. These barriers can take many forms, such as high start-up costs, patents, economies of scale, access to distribution channels, and government regulations. These barriers restrict the entry of new firms in the market and protect the market power of existing firms. Therefore, option B is the most appropriate choice.

An Obstacle That Prohibits New Firms from Entering an Industry