Which of the following is an example of a legal barrier to entry in a market?

• A. Brand loyalty among consumers
• B. Government-issued patents
• C. High startup costs
• D. Economies of scale

Answer: (B)

Verified step by step guidance

1. Understand what a legal barrier to entry means: it is a restriction imposed by law or regulation that prevents or limits new firms from entering a market.
2. Review each option and classify it as either a legal or non-legal barrier:
3. Brand loyalty among consumers is a market-driven factor, not a legal restriction.
4. Government-issued patents grant exclusive rights to produce or sell a product, legally preventing others from entering the market with the same product.
5. High startup costs and economies of scale are economic or structural barriers, not legal ones.