All of the following statements,except one,are valid statements regarding barriers to entry and the existence of large profits in an oligopoly industry.Which statement is not valid?

Question

Quizplus · Accepted Answer

Barrier to entry may lead to the existence of large profits in an oligopoly industry. The other statements are all valid in terms of how barriers to entry can affect industry characteristics. For example, barriers to entry can enable firms to spend more on research and development, which can help them develop new technologies and products. Additionally, barriers to entry can help maintain large firms within the industry, which can enhance the firms' ability to capture economies of scale. However, the existence of large profits is not a consequence of barriers to entry. In fact, barriers to entry can reduce competition and make it easier for firms to maintain their market power and generate profits.

All of the Following Statements,except One,are Valid Statements Regarding Barriers