Barriers To Entry Flashcards
1
Q
Define barriers to entry
A
The factors that could prevent a firm from entering and competing with in a market
2
Q
What are the barriers to entry?
A
Large start up costs Marketing costs Inability to gain economies of scale Price war Legal restrictions e.g. patents
3
Q
Define barriers to exit
A
The factors preventing a firm leaving a market even if it wanted to
4
Q
What are the barriers to exit?
A
Difficulty of selling off capital
High redundancy costs
Contracts with suppliers
