because they need not fear entry.

Self-Check Questions

1. Classify the following as a government-enforced barrier to entry, a barrier to entry that is not government-

enforced, or a situation that does not involve a barrier to entry.

a. A patented invention

b. A popular but easily copied restaurant recipe

c. An industry where economies of scale are very small compared to the size of demand in the market

d. A well-established reputation for slashing prices in response to new entry

e. A well-respected brand name that has been carefully built up over many years

2. Classify the following as a government-enforced barrier to entry, a barrier to entry that is not government-

enforced, or a situation that does not involve a barrier to entry.

a. A city passes a law on how many licenses it will issue for taxicabs

b. A city passes a law that all taxicab drivers must pass a driving safety test and have insurance

c. A well-known trademark
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