3. Which of the following is not a barrier to entry?
A. Patents
B. X-inefficiency
C. Economies of scale
D. Ownership of essential resources

Question

3.    Which of the following is not a barrier to entry?
A.    Patents
B.    X-inefficiency
C.    Economies of scale
D.    Ownership of essential resources

BlackTom AI · Accepted Answer

Consider the concept of barriers to entry in a market. When evaluating each option, think about whether it inherently makes it harder for new firms to enter a market or whether it reflects factors that can coexist with entry.
Option A: Patents. Patents grant exclusive rights to produce or sell a novel product or process, which directly hinders new competitors from freely entering the market for a period of time. This is a classic barrier to entry.
Option B: X-inefficiency. X-inefficiency refers to the excess cost that firms experience due to lack of competitive pressure, often because there is little rivalry in the industry. It is not a barrier that prevents new entrants from entering; instead, it describes inefficiency within firms that may persist after entry but does not by itself block entry.
Option C: Economies of scale. When large-scale production lowers average costs, new entrants face a disadvantage because incumbents can undercut prices or offer more competitive pricing due to lower costs. This constitutes a barrier to entry.
Option D: Ownership of essential resources. If a single firm controls essential inputs or resources necessary to produce a good, it can prevent or restrict other firms from entering the market, representing a barrier to entry.
In summary, patents, economies of scale, and control of essential resources are established barriers to entry, whereas X-inefficiency describes internal cost inefficiencies rather than a structural entry barrier. Therefore, the statement that aligns with 'not a barrier to entry' is the one describing X-inefficiency.

3. Which of the following is not a barrier to entry? A. Patents B. X-inefficiency C. Economies of scale D. Ownership of essential resources

View Explanation

Log in for full answers

Similar Questions

Government licensing is not a barrier to entry.

Which of the following is considered a barrier to entry into an industry?

As an example of Blank ______, the Federal Communications Commission licenses only so many radio and television stations in each geographic area.

Slashing prices is an example of an entry barrier created by a(n) .

Blank ______ create(s) legal barriers to entry.

Government creates barriers to entry.

The strongest barriers to entry effectively block all Blank ______.

The fundamental source of monopoly power is

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler