Question

In the early 2000s, analysts were predicting that although many legal music download sites would start up, that because of the technology, only a few, or perhaps even just one, would survive. A forecast that online music will end up with a few or only one seller will prove correct if online music firms:

a) Engage in perfect competition
b) Face high entry barriers
c) Embrace government regulation
d) Collaborate with each other

Answer 1

The forecast that online music will end up with a few or only one seller will prove correct if online music firms face high entry barriers.

Step-by-step explanation:

In the early 2000s, analysts were predicting that because of the technology, only a few, or perhaps even just one, legal music download site would survive. This forecast would be proven correct if online music firms face high entry barriers. Entry barriers are legal, technological, or market forces that discourage or prevent potential competitors from entering a market. In the case of online music, high entry barriers could include the cost of acquiring music rights, developing a user-friendly platform, and marketing to attract customers.