Question

Which of the following is an example of a barrier to entry?

Answer 1

The answer wold be High start-up costs.

Answer 2

The correct answer is B) high start-up costs.

An example of a barrier to entry is high start-up costs.

A barrier cost is an economic concept that shows that there is a high start-up cost that limits or prevent other competitors in an industry to enter into this business. These barriers or limitations make it complicate to other companies to participate in the business. What happens is that the existent companies in the industry want to protect or defend their investments, trade relations, earnings or market participation. That is why they put entry barriers.