Question

89. Which of the following comprise barriers to entry?

I. Large economies of scale required to be profitable
II. Established brand loyalty
III. Patent protection for the firm's product
IV. Rapid industry growth
A. I and II only
B. I, II and III only
C. II, III and IV only
D. III and IV only

Answer 1

The barriers to entry mentioned in the question are large economies of scale, established brand loyalty, and patent protection for the firm's product.

Step-by-step explanation:

The barriers to entry mentioned in the question are:

1. Large economies of scale required to be profitable: This is a situation that makes it difficult for new firms to enter the market because existing firms already have the advantage of producing at a lower cost due to their larger scale of operations.
2. Established brand loyalty: This is a barrier to entry because customers are loyal to established brands and may be less likely to switch to a new entrant.
3. Patent protection for the firm's product: This is a government-enforced barrier to entry that grants the firm exclusive rights to produce and sell a particular product for a period of time.

Therefore, the correct answer is B. I, II and III only.