One barrier to entry that may maintain an oligopoly is
A)government policy designed to limit foreign competition
B)a low minimum efficient scale
C)bounded markup pricing
D)efficiency wages that make it impossible for new entrants to compete profitably
E)executive payoffs

Question

Quizplus · Accepted Answer

Government policy designed to limit foreign competition can be a significant barrier to entry for new firms. This is because existing firms may have already established relationships with policymakers and regulations that favor their interests, making it difficult for new entrants to compete on a level playing field. In an oligopoly where a few firms control the market, these existing firms may use their political power to enact policies that protect their market share, making it even more challenging for new firms to break into the market.

One Barrier to Entry That May Maintain an Oligopoly Is