Barriers to entry into a market come in many forms. The lists of the usual barriers to entry include natural monopoly, legal monopoly, control of a physical resource, patent, copyright, and trademark, and intimidating potential competitors.
EXPLANATION
Barriers to entry is an economic term to prevent new entrepreneurs from entering certain industries or business fields easily. Generally, they will be faced with high initial costs or other obstacles. "Barriers to entry" certainly benefits the old companies. They avoid competition and will protect their income. “Common barriers to entry” includes utilizing special taxes for old companies. Besides, new companies will have difficulty obtaining operational licenses (licenses).
Some obstacles do occur due to government intervention, while they also occur naturally in a free market. Worse, it often happens that old companies lobby the government to prevent new companies from entering. The government seems to act, doing this to protect the integrity of the industry and prevent newcomers from selling products at lower prices.
In general, old companies do this. They impede barriers in various ways so that their comfort in the industries they pursue is not interrupted. This will indirectly cause a monopoly. Yet naturally, some obstacles do develop over time when old industry players have firmly rooted in society.
LEARN MORE
If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:
- The restaurant industry is characterized by a ______________ barrier to entry brainly.com/question/10446185
KEYWORD: barrier, monopoly, industry
Subject: Economy
Class: 7 - 9
Subchapter: Barriers Entry