00:03
The topic that we are going to study today is barriers to entry.
00:07
Now first of all, what exactly barriers to entry is? so barriers to entry can be defined as certain kind of factors which prevent the new firms to enter a market or an industry.
00:20
Now the basic purpose of these barriers to entry is to limit the competition.
00:25
So these may include some high startup costs or we can say some certain technological or legal factors.
00:33
Or strict government guidelines.
00:35
So which hinder, which poses an obstacle for the new firms to enter the market or the industry.
00:43
Now one by one we will study whether these scenarios are barriers to entry.
00:48
The first is part a, the city passes a law on how many licenses it will issue for taxi cabs.
00:55
So yes, it is a kind of barrier to entry which is enforced by the government.
01:02
Now what happens that a city has passed a law so which states that so these are the number of the licenses which will be issued by for the taxi cabs now the basic purpose of passing such laws or by the government is to ensure that the customers get the appropriate amount of goods and services that is the right quantity of the taxi cab service is provided to the customers now coming to part b the city passes a law that all taxi cab drivers must pass a driving safety test and have insurance no it is not a barrier to entry it is more a kind of a government law so a government has passed the law that all the people who will drive taxi cab they will have to pass a driving safety test and have insurance the basic purpose of passing such law is to ensure that the customers who are traveling in the taxi they are safe there is no injury to their lives now next next is a well -known trademark.
02:07
So we can say yes, it is a barrier to entry...