If barriers to entry exist in a market,then:
A)the costs of entry and exit are relatively low.
B)there will be few close substitutes of the product in the market.
C)firms will be incurring losses in both the short and long runs.
D)firms will tend to have relatively less monopoly power.
E)the existing firms will quit the market in the long run due to mounting losses.

Question

Quizplus · Accepted Answer

Barriers to entry imply that it is difficult for new firms to enter the market and compete with existing firms. As a result, there will be few close substitutes to the existing firms' products, and they will have greater market power. This could potentially lead to higher profits for the existing firms, but it does not necessarily mean that they will incur losses or have low entry and exit costs.

If Barriers to Entry Exist in a Market,then