discuss the major barriers to entry into an industry. explain how each barrier can foster either monopoly or oligopoly. which barriers, if any, do you feel give rise to monopoly that is socially justifiable?

Respuesta :

There are five major barriers to enter in to any industry.

1) Economies of scale – On occasion, the market prohibits the operation of more than one firm due to cost advantages brought about by economies of scale. This could result in a monopoly.

2) High fixed costs – Since the majority of manufacturing required some fixed factors, the new company might not have the necessary funds.

3)Patents: When a company has patent rights for a certain class of goods, it can monopolize the market.

4)Ownership of specific input is required since outcome requires input. However, there are situations when a single company is the only owner of an input needed to make an output. Additionally, a market monopoly can result from this.

5) Competition from others - Already existing businesses will compete with the new entry. However, the performance of that competing company depends on the state of the market.

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