CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Which is (are) NOT defined as barriers to entry?

I. Patents
II. Monopolies
III. Government licensing
IV. Economies of scale
V. Market forces
VI. Defects
A. I, II and V
B. II, V and VI
C. III, IV and V
Explanation: Barriers to entry limit the ability of new firms to compete in the industry. Of the above, only patents, government licensing, and economies of scale fit this description.

User Contributed Comments 6

User Comment
chamad Defects?
dan1987 My thought exactly chamad, I think it is reference to products. In which case this is actually an opportunity for companies to enter the market and therefore not a barrier
Mariana80 How can a monopoly not be a barrier to entry?
jnptrsn1 A pre existing monopoly could lower costs below the average total costs in the short term to dissuade any new firms from forming and being sustainable/profitable.
alles According to the curriculum, a monopoly has high barriers to entry. Maybe it's not the monopoly per se that is "defined" as a barrier to entry. But it "has" barriers to entry. I only got this question right because I knew that V and VI would have to be included in the answer.
rizkyafian monopoli has barrier to entry
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