Which of the following is an example of a company whose barrier to entry is owning all or almost all of a resource? a) DeBeers b) Toyota c)Google d) Coca Cola e) a and c
The barriers to entry are the restrictions that the economy has which prevents the entry of new firms into the market. Normally the barriers to entry exist in the imperfect forms of the market such as the monopoly, duopoly, oligopoly and monopolistic competition. The market which has the highest degree of barriers to entry is the monopoly and the one with least is the monopolistic competition. There will be no barriers to entry in the perfect competition.
The barriers to entry can be because of various reasons. It can be because of the natural factors such as the availability of certain product in certain place only. This includes the availability of diamond in the world which is mainly owned and operated by DeBeers. They own almost all the diamond mines. The industry has the strong barriers to entry due to the natural characteristics of diamond along with the government restrictions.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
