Quizzes & Activities
Barriers to Entry (Quizlet Revision Activity)
- Level:
- A-Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 8 Apr 2022
Here are ten key terms relating to barriers to entry in monopolistic markets - test your understanding using this Quizlet revision activity
Summary of the key terms
Sunk costs
Costs that cannot be recovered if a business decides to leave an industry
Patents
Right under law to produce and market a good for a specified period of time
Licence
Permits a firm to operate in specific markets or locations e.g. to operate as a pub or a taxi business
Economies of scale
Cost advantages that a business can exploit by expanding the size of production
Brand loyalty
A measure of the degree of attachment that a consumer has for a particular product
Natural monopoly
Occurs when one very large business can supply the entire market at a lower unit cost and price than two
Market deregulation
Intervention by government to open up a market to new competition e.g. by lowering barriers to entry
Limit pricing
The strategy of reducing price to deter entry of potential entrants
Predatory pricing
A deliberate strategy of driving competitors out of a market by setting very low prices or selling below average variable cost
First mover advantage
Idea taken from Game Theory that early entry into a new market can give one firm a commercial edge over actual & potential rivals
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