CAIE A-Level Economics A2 7.6.3 Barriers to Entry Exit Questions

Practise explaining economies of scale, legal restrictions and capital requirements as barriers to entry and competition in A2 questions.

Exam points

Explain how economies of scale, legal restrictions, capital requirements and other barriers affect entry and competition.

[Maximum number: 1]

Which characteristic of an industry works towards reducing the barriers to entry for new firms?

significant advertising expenditure by existing firms

significant economies of scale

the absence of large costs associated with investment in capital assets

the possession by existing firms of legal rights to produce a product (e.g. patents)

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