A natural monopoly's preemption of entry by other firms by exploiting its economies of scale is an example of

Question

Business

Ruby Hooper

15 November, 07:51

A natural monopoly's preemption of entry by other firms by exploiting its economies of scale is an example of

+1

Answers (2)

Know the Answer?

Mike · Answer 1

Answer: repute barrier or barrier to entry.

A natural monopoly's preemption of entry by other firms by exploiting its economies of scale is an example of barrier to entry.

This kind of monopoly is when a pre-existing business, who has a well established customer base, a good reputation in the market and cost effective prices sets up a monopoly because of its size, prices or power and causes a barrier to entry for all the new business who wish to enter.

Kaitlynn Alvarez · Answer 2

I believe the answer is: Barrier of entry

When one specific market is controlled by a big organization that possess the ability to utilize large number of resources, that organization could definitely create a cheaper product compared to smaller organizations who do not.

Because of this, a barrier is created for new organization who want to compete since it is impossible for them to take the big organization heads on in term of pricing.