How do barriers to entry help monopolies maintain power?

A monopoly is a firm with a majority market share in a particular industry. Barriers to entry are things that stop potential new entrants from entering the market, thus keeping competition in monopolistic markets low and as a results allows monopolies to maintain their power.

Examples are; economies of scale - lower average cost as output rises due to bargaining power, experience etc. New entrant won't be able to charge a price as low as the monopoly. High start up costs (technology, energy) brand loyalty (coca-cola/apple) network effects (facebook)

ND
Answered by Navjyot D. Economics tutor

8820 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

How do you determine consumer and producer surplus in a monopoly?


Explain what a balance of trade deficit is


Explain the meaning of the term ‘externality’ and give an example of one that is negative.


Explain a benefit of international trade for UK consumers


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences