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Which of the following is a type of barrier to entry?

A. economies of scale
B. excess capacity
C. differentiated products
D. A and B only
E. B and C only

User RCYR
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1 Answer

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Final answer:

Economies of scale and excess capacity are types of barriers to entry.

Step-by-step explanation:

A barrier to entry is a factor that can make it difficult for new firms to enter and compete in a market. One type of barrier to entry is economies of scale, which occur when a firm can produce goods or services at a lower average cost as it increases its production volume. This can create a cost advantage for existing firms and make it difficult for new firms to compete.

Another type of barrier to entry is excess capacity. This refers to a situation where existing firms in an industry have more production capacity than is needed to meet current demand. This excess capacity can make it difficult for new firms to compete, as existing firms can lower their prices or increase their output to discourage new entrants.

Therefore, the correct answer is D. A and B only, as both economies of scale and excess capacity are types of barriers to entry.

User Chris Chute
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