How to establish barriers to entry.
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Discuss ways firms establish barriers to entry and explain how they benefit firms but not consumers. Give an example of a law or regulation that limits the ability of firms to establish barriers to entry and an example of a law or regulation that helps firms establish barriers to entry.
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Solution Summary
This solution discusses ways firms establish barriers to entry. It explains how they benefit firms but not consumers and gives an example of a law or regulation that limits the ability of firms to establish barriers to entry and an example of a law or regulation that helps firms establish barriers to entry. The explanation is given in 334 words.
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There are many ways for firms to establish barriers to entry, lets list some of them here:
-Technology. For example, Microsoft owns Windows which contain a lot of advanced technology (often have patents as well) that are hard for other firms to develope unless if they are willing to invest a lot into R&D, this is unlikely for anyone who wants to make money.
-Market share/consumer loyalty. For example, Facebook is a site that has little technology, but because ...
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