Question

Which of the following are important sources of entry barriers? (Check all that apply.)

Multiple select question.
government policy
network effects
capital requirements
economies of scale
credible threat of retaliation
low product differentiation

Answer 1

Government policy, economies of scale, capital requirements, and credible threat of retaliation are important sources of entry barriers.

Step-by-step explanation:

The important sources of entry barriers are:

• Government policy: Government laws and regulations can create barriers to entry, such as licensing requirements or restrictions on the number of licenses issued.
• Economies of scale: When a company achieves economies of scale, it can produce its products at a lower cost than its competitors, creating a barrier for new entrants.
• Capital requirements: Large capital investments or financial resources required to start or compete in an industry can be a significant barrier to entry.
• Credible threat of retaliation: Existing firms may be able to discourage new entrants by signaling that they will aggressively protect their market share and respond with retaliation if new competitors enter the market.