Capital requirement and economies of scale are examples of two potential barriers to entry that can keep out new competitors.

Question

Quizplus · Accepted Answer

Capital requirement refers to the initial investment needed to start a business, which can be prohibitively high in some industries, deterring new entrants. Economies of scale allow established companies to produce goods or services at a lower cost per unit than a new entrant could, due to their larger scale of operation, thus acting as a barrier to entry for new competitors.

Capital Requirement and Economies of Scale Are Examples of Two