Series 79 practice questionmediumBarriers to Entry
A key barrier to entry in the commercial airline industry is:
- AMinimal regulatory oversight
- BLow labor costs
- CHigh capital requirements for aircraft and infrastructure✓ Correct answer
- DFragmented customer base
Explanation
Why C — High capital requirements for aircraft and infrastructure
High costs for aircraft and infrastructure make it difficult for new airlines to compete. Labor costs can be high, not low, and airlines are heavily regulated. Customer fragmentation does not prevent entry.
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