the Justice Department ruled against American Express and Mastercard for imposing restrictions on retailers

that encouraged customers to use lower swipe fees on credit transactions.

In some cases, large advertising budgets can also act as a way of discouraging the competition. If the only way

to launch a successful new national cola drink is to spend more than the promotional budgets of Coca-Cola and

Pepsi Cola, not too many companies will try. A firmly established brand name can be difficult to dislodge.

Summing Up Barriers to Entry

Table 9.1 lists the barriers to entry that we have discussed. This list is not exhaustive, since firms have proved

to be highly creative in inventing business practices that discourage competition. When barriers to entry exist,

perfect competition is no longer a reasonable description of how an industry works. When barriers to entry are

high enough, monopoly can result.
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