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Author Question: In discussions of barriers to entry, what is meant by the term "virtuous cycle"? (Read 738 times)

nautica902

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In discussions of barriers to entry, what is meant by the term "virtuous cycle"?


A virtuous cycle refers to successful research and development that leads to information that is used to develop other new products.


A virtuous cycle refers to the situation where the pursuit of self-interest in establishing an entry barrier leads to an increase in social welfare (the "invisible hand").


A virtuous cycle refers to a situation where if a firm can attract enough customers initially, it can attract additional customers because its product's value has been increased by other customers using it, which attracts even more customers.


A virtuous cycle refers to a firm using the profits from a monopoly in one market to establish a monopoly in another market.



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Marked as best answer by nautica902 on Oct 8, 2019

asware1

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