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Describe and explain two other characteristics of the required factory investment that would make it a more effective barrier to entry.

Describe and explain two other characteristics of the required factory investment that would make it a more effective barrier to entry.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Suppose that production in a given industry requires a factory. The degree to which this constitutes an effective barrier to entry depends on the characteristics of the required factory investment.  For example, if building an effective factory requires expensive land or equipment, then entrants will need to raise large amounts of capital, making the necessity of a factory a more effective barrier to entry.

Q. Describe and explain two other characteristics of the required factory investment that would make it a more effective barrier to entry.

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