Which of the following is not a potential barrier to entry into a product market?
A)A patent on the design of the product
B)The absence of economies of scale in the product market
C)Government licensing of the product's producers
D)The control of an input crucial to produce the product
E)A downward-sloping demand curve for the product

Question

Quizplus · Accepted Answer

The absence of economies of scale in the product market would not be a barrier to entry as it would not provide an advantage to existing firms over new entrants. The other options (A, C, D, and E) are potential barriers to entry. A patent provides legal protection for the design of the product, government licensing may limit the number of producers in the market, control of a crucial input would make it difficult for new entrants to obtain the necessary resources, and a downward-sloping demand curve suggests that the existing firms have already established a strong customer base.

Which of the Following Is Not a Potential Barrier to Entry