Economics Perfect Competition Questions
The role of barriers to entry in monopoly is to restrict or prevent new firms from entering the market, thereby allowing the monopolistic firm to maintain its market power and control over prices. Barriers to entry can take various forms, such as high start-up costs, exclusive access to key resources or technology, legal restrictions, economies of scale, and strong brand loyalty. These barriers create a significant advantage for the monopolistic firm, making it difficult for potential competitors to enter the market and challenge its dominance.