The factors which put new firms at a disadvantage in entering an industry, as compared with the firms already established in it, are called:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → barriers to entry
Barriers to entry are the factors that put new firms at a disadvantage against firms already in an industry. The New Economic Policy aimed at removing them.
Tariff barriers, non-tariff barriers and quantitative restrictions all limit imports into a country. They do not deal with new firms entering an industry.
NCERT (2026-27): Glossary: “Barriers to Entry – This refers to the factors which make it disadvantageous for new entrants to enter an industry as compared with the firms already established within the industry.” Glossary: “Tariff Barriers – All the restrictions on imports by a government in the form of taxes.” Glossary: “Non-tariff Barriers – All the restrictions on imports by a government in the form other than taxes. They mainly include restrictions on quantity and quality of goods imported.” “3.2 Background … The thrust of the policies was towards creating a more competitive environment in the economy and removing the barriers to entry and growth of firms. …” |