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The barrier to entry behind the Boeing and Airbus oligopoly comes from economies of scale combined with:
AMarket demand
BGovernment subsidy
CPatent protection
DConsumer loyalty
Answer & Solution
Correct answer: A. Market demand
1. Whether scale economies create a barrier depends on how large the market is.
2. This combination of economies of scale and market demand creates the barrier to entry.
3. That barrier led to the Boeing and Airbus oligopoly for large passenger aircraft.
4. If the market were far larger, more firms could each reach efficient scale.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 10 'Monopolistic Competition and Oligopoly', sections 10.1-10.2_
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