Which of the following is an example of a barrier to entry? (i)
A key resource is owned by a single firm.
(ii)
The costs of production make a single producer more efficient than a large number of producers.
(iii)
The government has given the existing monopolist the exclusive right to produce the good.
A)(i) and (ii) only
B)(ii) and (iii) only
C)(i) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

(i) is an example of a barrier to entry because when a key resource is owned by a single firm, other firms are unable to access it and may be unable to compete. 
(ii) is also an example of a barrier to entry because if the costs of production are high, it may be difficult for new firms to enter the market and be profitable, while existing firms have already achieved economies of scale. 
(iii) is another example of a barrier to entry because when the government grants an exclusive right to produce a good, no other firms are legally allowed to enter the market and compete. All three options are valid examples of barriers to entry.

Which of the Following Is an Example of a Barrier