Question

Determine if each example represents a barrier to entry or not.

Is an example of a barrier to entryIs not an example of a barrier to entry

Answer Bank

Boeing already serves a large fraction of the jumbo jet market and is able to produce at a lower average cost than any potential competitors.

Tinseltown Theaters shows almost all the most popular newly‑released movies.

Pfizer is the only firm that is legally allowed to produce and sell Lipitor, a best‑selling cholesterol drug.

DeBeers owns nearly all of the world's diamond mines.

Answer 1

Boeing already serves a large fraction of the jumbo jet market and is able to produce at a lower average cost than any potential competitors.- Is a natural monopoly so it is a barrier to entry

Tinseltown Theaters shows almost all the most popular newly‑released movies- Is not a barrier to entry as other theatres can show these movies too

Pfizer is the only firm that is legally allowed to produce and sell Lipitor, a best‑selling cholesterol drug.- Is a barrier to entry as its a legal monopoly.

DeBeers owns nearly all of the world's diamond mines.- Is a barrier to entry as it is a near monopoly