Which of the following comprise barriers to entry?
I.Large economies of scale required to be profitable
II.Established brand loyalty
III.Patent protection for the firm's product
IV.Rapid industry growth
A) I and II only
B) I, II and III only
C) II, III and IV only
D) III and IV only

Question

Quizplus · Accepted Answer

I. Large economies of scale required to be profitable act as a barrier to entry as new firms would struggle to achieve the same level of scale and efficiency immediately.
II. Established brand loyalty prevents new entrants from capturing market share as customers are already committed to existing brands.
III. Patent protection for the firm's product provides a legal monopoly for the firm, discouraging new entrants from developing similar products.
IV. Rapid industry growth does not necessarily act as a barrier to entry, as it may attract new firms.

Which of the Following Comprise Barriers to Entry