Final answer:
Moving first in a market can create barriers to entry like economies of scale and legal protections, making it harder for new firms to compete and establishing a first-mover advantage.
Step-by-step explanation:
Moving first in a market can indeed pay off by creating critical resources that can act as barriers to entry for other firms. These barriers can include significant factors such as economies of scale, which can lead to a natural monopoly; control of vital physical resources; and various legal protections like patents, copyrights, and trademarks.
In competitive markets, profits inspire businesses to expand, which can lead to increased industry profits. However, when a company moves first and uses its time lead effectively, it can establish itself in such a way that it becomes difficult for new entrants to compete, creating a first-mover advantage.