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Mergers help to achieve the necessary size to realize economies of scale. It is important in the areas of technology; media, where fixed costs are large and marginal cost are low.
• Barriers created by government
This includes licenses, patent and copyright. Licensing is necessary for maintaining the quality of the individuals in different professions. Patent and copyrights give the producer of a new invention or printed work the right to the profits from that work for a number of years in order to encourage research, innovation and development of new products. These helps firm to gain market power and act as barrier to entry...
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