Discuss the major barriers to entry into an industry, assignment help

Discuss the major barriers to entry into an industry. Explain how each barrier can foster either monopoly or oligopoly. Which barriers, if any, do you feel give rise to monopoly that is socially justifiable?

And comment on 2 Discussion

Barriers into an industry also known as “Barriers to Entry” are the existence of high startup costs or other obstacles that prevent new competitors from easily entering an industry. Barriers such as price raising; deliberatively increasing prices making it very expensive for new firms to enter the market. The intensity of the competitions leads new startups to try to enter business with high barriers, but doing so would put the business in significant disadvantage.Product differentiation is another barrier where customer loyalty and brand identification becomes a significant influence. Government policy’s such as licensing requirements can be another barrier as well. It is because of the government policy’s that will demonstrate the right to have a monopoly. A business who has to pay just to say that they are a certain type of business should be exclusive or in control of their supply or trade.

The second Discussion

The first major barrier to enter an industry is economies of scale. It is when unit price and unit cost for consumers depends on the existence of a pure monopoly. Therefore new firms cannot afford to start up in an economy of scale. This is a monopoly because since many businesses are in competition this will cause the price to go up. The second major barrier of entry are legal barriers. For legal barriers you will need either a Patent saying you can produce your invention for 20 years or a license for you to operate and sell certain things in your business. This is an oligopoly because if you need a license there are less people selling the product especially if you just invented something. The monopoly is justified because it will cause cost to go up since there are many competitors in one market and varying costs. The oligopoly is justified because you should know if your product is safe or if you know what you are doing to be able to sell your product.

dont need to be long for each of them

 

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