The strongest barriers to entry effectively block all ______.
a) marketing efforts
b) potential competition
c) economies of scale
d) monopolistic situations
Answer. b) potential competition
The toughest lock outs might be ultra-strong in that they engender no possible competition at the industry or market level. Barriers to entry include the elements that hinder a new firm or a competitor to enter into a particular market that is already crowded with the established firms. The barriers to entry may encompass variables like high start-up capital, regulatory impedances, limited distribution channels, possession of proprietary technology or patents, and brand loyalty of the customers. The barriers of entry which are high lead to deter many entrants, and the businesses have a difficult time trying to secure a place in the market. In short, the seated firms keep their market dominance and/or profitability by either dissuading or preventing new market entrants. If a firm seeks to enter a market dominated by established players, it denotes conquering the highest limits of entry. It is the first step for a firm to be able to compete in that industry.
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