Often asked: Which Of The Following Is An Example Of A Legal Barrier To Entry?

Which of the following are legal barriers to entry?

There are 4 main types of barriers to entry – legal ( patents/licenses ), technical (high start-up costs/monopoly/technical knowledge), strategic (predatory pricing/first mover), and brand loyalty.

Which is not an example of a legal barrier to entry?

Decreasing the average cost is not a legal barrier to entry in a monopolized market. Thus, the correct answer is c.

What is legal barrier?

barriers to entry the legal, technological, or market forces that may discourage or prevent potential competitors from entering a market copyright a form of legal protection to prevent copying, for commercial purposes, original works of authorship, including books and music deregulation removing government controls

Which of the following is the example of legal monopoly?

AT&T Corp. is a classic example of a legal monopoly, operating as one until 1982. With the invention of the telephone in 1876 by Alexander Graham Bell, the firm the inventor formed (now AT&T) was able to establish itself as a monopoly by 1907.

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What is a common barrier to entry?

Common barriers to entry include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs. Other barriers include the need for new companies to obtain licenses or regulatory clearance before operation.

What are strategic barriers of entry?

Strategic barriers, in contrast, are intentionally created or enhanced by incumbent firms in the market, possibly for the purpose of deterring entry. These barriers may arise from behaviour such as exclusive dealing arrangements, for example.

Is public franchise a barrier to entry?

A legal monopoly is a market in which competition and entry are restricted by the concentration of ownership of a natural resource or by the granting of a public franchise, government license, patent, or copyright. A firm can create its own barrier to entry by buying up a significant portion of a natural resource.

Which of the following is not barrier to entry in a monopolized market?

A patent is not a technical barrier to entry in a monopoly. Hence, the correct answer is a. A patent is a legal barrier to entry because it is given

Is the US Postal Service is an example of a public franchise?

The U.S. Postal Service is an example of a public franchise. The profit-maximizing monopolistic competitive firm produces a level of output at which marginal revenue equals marginal cost.

What are market barriers?

A barrier to market entry is an obstacle (usually high costs) which prevents a product from gaining traction in a new market. Those who do make such investments, however, then have a natural interest in preventing others from obtaining a foothold in a market—in order to limit competition and therefore maximize profit.

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How do you create barriers to entry?

There are seven sources of barriers to entry:

  1. Economies of scale.
  2. Product differentiation.
  3. Capital requirements.
  4. Switching costs.
  5. Access to distribution channels.
  6. Cost disadvantages independent of scale.
  7. Government policy.
  8. Read next: Industry competition and threat of substitutes: Porter’s five forces.

How do you increase barriers to entry?

The following steps can help a company widen the moat around itself and keep competitors, both existing and potential, safely on the other side:

  1. Identify and Understand Intangible Assets.
  2. Understand reasons for customer goodwill.
  3. Develop Cost Advantages.
  4. Behave like a Leader.
  5. Understand your Strengths and Weaknesses.

What are three types of legal monopolies?

Terms in this set (4)

  • natural monopoly. costs are minimized by having a single supplier Ex: Sempra Energy Utility.
  • geographic monopoly. small town, because of its location no other business offers competition Ex: Girdwood gas station.
  • government monopoly. government owned and operated business Ex: USPS.
  • technological monopoly.

What are legal monopolies and what are some examples?

Legal monopolies are created for the purposes that offer a specific product or service to consumers, at a regulated price. Various governments have imposed legal monopolies on a variety of commodities, including tobacco, salt, and iron.

What are the main features of monopoly?

Key Points Monopoly characteristics include profit maximizer, price maker, high barriers to entry, single seller, and price discrimination.

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