Explain the differences between the definitions

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Question: 1. Compare and contrast them. Explain what are the similarities, and the differences between the definitions. Are there in your view any flaws in the definitions? Explain.

Definition 3 (James M. Ferguson, 1974 p. 10): A barrier to entry is a factor that makes entry unprofitable while permitting established firms to set prices above marginal cost, and to persistently earn monopoly return.

Definition 7 (Dennis Carlton and Jeffrey Perloff, 1994 p. 110): A barrier to entry is anything that prevents an entrepreneur from instantaneously creating a new firm in a market. A long-run barrier to entry is a cost necessarily incurred by a new entrant that incumbents do not (or have not had to) bear.

Reference no: EM132208477

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