Which of the following is considered a barrier to entry into an industry?

• A. Homogeneous products
• B. Perfect information
• C. Many buyers and sellers
• D. High startup costs

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'barriers to entry' in microeconomics: these are obstacles that make it difficult for new firms to enter an industry and compete with existing firms.
2. Review each option and analyze whether it makes entering the market harder or easier. For example, 'homogeneous products' means products are identical, which usually increases competition but does not prevent entry.
3. Consider 'perfect information' which implies all buyers and sellers have full knowledge about prices and products; this transparency typically lowers barriers rather than creating them.
4. Look at 'many buyers and sellers' which indicates a competitive market structure like perfect competition, where entry is generally easy.
5. Recognize that 'high startup costs' require significant initial investment, making it financially difficult for new firms to enter the industry, thus acting as a barrier to entry.