Which of the following is NOT an example of a barrier to entry in a market?

• A. High startup costs
• B. Patents held by existing firms
• C. Perfect information available to all firms
• D. Government licensing requirements

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of 'barriers to entry' — these are obstacles that make it difficult for new firms to enter a market and compete with existing firms.
2. Step 2: Identify common examples of barriers to entry, such as high startup costs, patents held by existing firms, and government licensing requirements, all of which restrict or increase the cost of entry.
3. Step 3: Analyze the option 'Perfect information available to all firms' — perfect information means all firms have equal and complete knowledge about prices, products, and market conditions, which actually facilitates competition rather than hindering entry.
4. Step 4: Conclude that 'Perfect information available to all firms' is NOT a barrier to entry because it does not prevent or discourage new firms from entering the market.
5. Step 5: Therefore, the correct answer is the option that represents a condition promoting competition rather than restricting it.