How do barriers to entry help monopolies maintain power?

A monopoly is a firm with a majority market share in a particular industry. Barriers to entry are things that stop potential new entrants from entering the market, thus keeping competition in monopolistic markets low and as a results allows monopolies to maintain their power.

Examples are; economies of scale - lower average cost as output rises due to bargaining power, experience etc. New entrant won't be able to charge a price as low as the monopoly. High start up costs (technology, energy) brand loyalty (coca-cola/apple) network effects (facebook)

ND
Answered by Navjyot D. Economics tutor

9451 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

8 What is likely to happen when the rate of interest increases? A) consumer spending increases B) firms buy fewer machines C) people hold more cash D) savers earn lower rewards


What is the difference between a contractionary and expansionary fiscal policy?


What will happen to the price level when the price of imports increases?


Explain why firms in the pharmaceutical industry can charge different prices for the same drug in different countries. (15 marks)


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning