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Why does a barrier to entry reduce the contestability of a market?
A
A barrier to entry makes consumers unable to switch suppliers, preventing all competition in the market.
B
A barrier to entry makes starting competition difficult or costly, reducing the threat of new rivals.
C
A barrier to entry guarantees that firms will compete by lowering prices, increasing market contestability.
D
A barrier to entry makes existing firms leave more quickly, increasing the threat of new rivals.
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7.6.3 barriers to entry and exit Flashcards
27 flashcards on CIE Intl A Level Economics 7.6.3 barriers to entry and exit: the key terms and definitions you need to recall.