Home > Terms > Armenian (HY) > մուտքի սահմանափակում

մուտքի սահմանափակում

How firms keep out competition--an important source of incumbent advantage. There are four main sorts of barriers. * A firm may own a crucial resource, such as an oil well, or it may have an exclusive operating license, for instance, to broadcast on a particular radio wavelength. * A big firm with economies of scale may have a significant competitive advantage because it can produce a large output at lower costs than can a smaller potential rival. * An incumbent firm may make it hard for a would-be entrant by incurring huge sunk costs, spending lots of money on things such as advertising, which any rival must match to compete effectively but which have no value if the attempt to compete should fail. * Powerful firms can discourage entry by raising exit costs, for example, by making it an industry norm to hire workers on long-term contracts, which make firing an expensive process.

0
Collect to Blossary

Member comments

You have to log in to post to discussions.

Terms in the News

Featured Terms

Tatevik Gyulamiryan
  • 0

    Terms

  • 0

    Blossaries

  • 2

    Followers

Industry/Domain: Education Category: Teaching

բանավոր հմտություններ

skills or abilities in oral speech, ability of speech, fluency in speaking