Answer to Question #304696 in Macroeconomics for Fauz

Question

What do patent,economies of scale and franchise have in common

Answer 1

They are all barriers to entry

Patent is a document certifying the authorship of an invention and the exclusive right to use it for a certain period.

Economies of scale are the cost advantages that companies receive when production becomes efficient

Exclusive franchises are provided to special businesses, which also helps them create a barrier to entry for other competitors.

Therefore, all these situations create a barrier to entry for new entrants.