Which of the following is NOT potentially a barrier to entry into a product market? A. patent protection on the design of the product B. the absence of economies of scale in the product marketC. government licensing of the product's producers D. the control of a crucial input necessary to produce the product E. All of the above are potentially barriers to entry into a product market.

Question

Business

Zavier Shepard

21 June, 07:15

Which of the following is NOT potentially a barrier to entry into a product market? A. patent protection on the design of the product B. the absence of economies of scale in the product marketC. government licensing of the product's producers D. the control of a crucial input necessary to produce the product E. All of the above are potentially barriers to entry into a product market.

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Answers (1)

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Simone · Answer 1

The correct answer is option B.

Explanation:

If a producer has patent for a product it means others cannot produce it. So, this a barrier to entry.

Similarly, in case of licensing only the producer holding license can produce. So, it is barrier to entry.

The control to a crucial input will also restrict others to produce. So, this will also be considered as a barrier.

Economies of scale is cost advantage to a firm because of its large size. It is a barrier to entry as it would discourage other new firms to enter.

Absence of economies of scale is not a barrier to entry in the product market.