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From course:

Industrial Organisation 2022

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Question:

What is the classification of entry barriers according to Bain, and what does Chicago school think?

Author: Hjalmer Pedersen



Answer:

Definition of entry barriers: Entry barriers are defined in many ways but namely: ” Conditions that allow firms to earn abnormal profits without attracting entry of new competitors” - Bain 1956 Chicago school opposes this view: cost differentials above rarely last in the long run  not entry barriers per se important BUT the speed at which barriers can be overcome.


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