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Natural barriers to entry in network externalities

Assume that an equipment or software firm has copyrights and patents which restrict other firms from producing goods embodying its technology, and which the firm is shielded from competition since customers can deal along with each other at lower costs when they utilize a standardized technology. The entry barrier protecting that firm derives by: (w) long-established brand loyalty. (x) exclusion and non-rivalry in the nature of the good. (y) economies of scale in producing the good. (z) network externalities in utilization of the good.

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