Barriers to entry in pure oligopoly, Managerial Economics

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Barriers to entry in pure oligopoly

The barriers to entry can be artificial or natural.

Artificial Barriers

This can be acquired through:

State protection through issuance of exclusive market (franchise) licences and patent rights.
Control of supply of raw materials
Threat of price war, if financial resources can sustain loses temporarily the cartel or price leader can threaten the new entrant by threatening to lower prices sufficiently to scare new firms.

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