Barriers to entry are not strong enough to protect monopoly profits.

Question

Quizplus · Accepted Answer

Barriers to entry serve as obstacles for new firms to enter a market, which can limit competition against existing firms and ultimately protect monopoly profits. Therefore, if barriers to entry are strong enough, they can prevent new firms from entering the market and challenging the existing monopoly's position. However, if barriers to entry are not strong enough, new firms can easily enter the market, increase competition, and erode the monopoly's profits. Therefore, the statement that barriers to entry are not strong enough to protect monopoly profits is false.

Barriers to Entry Are Not Strong Enough to Protect Monopoly