BARRIERS OF ENTRY- OLIGOPOLY.

  1. Predatory Pricing and Limit Pricing– Firms that have lower costs are able to set costs extremely low so competitors are unable to compete. 
  2. Advertising – Large firms can spread the fixed costs of advertising so advertising cost is low ( economies of scale) while new firms will find it hard to do this. 
  3. Branding– Through advertising and allows these big firms to show their unique characteristics making demand more inelastic. 
  4. Integration – grow in size they can integrate both horizontally and vertically(forward and backwards) enabling them to pursue predatory pricing.
  5. Research and Development– These big firms can increase their expenditure by developing new methods that would create new products to edge over their competitors.
  6. Multiplicity of Brands – many customers like to change brands so it is good for a firm to own a number of brands from different markets. This should restrict the new firms from entering.
  7. Non Price Competition – If they help to increase customer satisfaction this would allow them to avoid price war and build up brand loyalty. 
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