Barriers to entry/exit

Question 1

define barriers to entry?

Answer 1

This will prevent a new industry from entering the market.

Question 2

define barrier to exit?

Answer 2

this will prevent a firm from leaving the industry

Question 3

Define structural barriers?

Answer 3

Technical barriers (start up/capital costs)
this means that new firms may be discouraged as they will have to consider the beggining costs will be high.

Question 4

Define strategic?

Answer 4

Firms are already operating in the business they might want to pursue anti competitive practice such as predatory pricing they will differ competition which will drive out new entrants from entering the market.

Question 5

Define economies of scale?

Answer 5

Naturally a firm can produce more with low average cost. This will encourage new entrants to enter the market.