Which Barrier to Entry Do Corporations Such as P&G Use

question 47

Multiple Choice

Which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty?

• A) rivalry among existing firms
• B) switching costs
• C) capital requirements
• D) product differentiation
• E) access to distribution channels

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Definitions:

Demand Curve

A diagram that displays the connection between the cost of a commodity and the level of demand for it within a set timeframe.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, measured above the supply curve to the equilibrium price.

Price Floor

A government-imposed minimum price charged for a good or service, intended to prevent prices from falling below a certain level to protect producers or market sectors.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus the amount they actually receive in the market.