How will high entry barriers into a market influence the likelihood that some inefficient (high-cost) firms will survive, and (b) the incentive of entrepreneurs to develop substitutes for the product supplied by the firms? Are competitive pressures present in markets with high barriers to entry? explain please!
2007-11-10 15:49:31 · 2 answers · asked by Anonymous in Social Science ➔ Economics
If you have a inefficient firm operating, but high barriers prevent others from being able to start a competing business then the inefficient business is more likely to survive.
If you can't go in and directly compete producing a product, then you are more likely to consider developing a substitute. Kind of like trying to find a loophole.
High barriers to entry = lower competitive pressures. New companies can't come in and compete like they want. It is the opposite of the usual economic Utopia for finding natural equilibrium where you always throw in the assumption of perfect competition.
2007-11-10 18:10:01 · answer #1 · answered by JuanB 7 · 0⤊ 0⤋
If you look to Yahoo answers for help with your homework then when you get into the real world and look for jobs your peers and people you are doing business with will eat you for breakfast. do your own homework.
2007-11-10 15:58:21 · answer #2 · answered by jimstock60 5 · 0⤊ 2⤋