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Competition in Industrial Economics
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- Words:
- 2439
- Submitted:
- Thu Jul 11 2002
... Competition in Industrial Economics I. Introduction "A contestable market is characterized by free entry and free exit."1 However the access to certain markets is difficult, because certain barriers of entry are erected. This essay will outline the role of barriers of entry into an industry as a device for the maintenance of a monopoly. As an initial step I will define what is meant by the term "barriers of entry". Second, I show up the different kinds of barriers that can be found. Third, I evaluate the different barriers to point out whether they are significant for maintaining a monopoly or not. Finally I give two examples of nowadays barriers that can be found in the UK. II. Barriers of entry - a Definition The number of firms in a competitive market in the long run depends on the possibility of firms to enter and exit this market. A market with free entry and
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