Due to a lack of threat of new entrants, Cuba’s economy is currently stagnant and unproductive. The threat of new entrants largely depends on what barriers to entry exist. Therefore, Cuba’s barrier to entry is the main reason why there is a lack of threat of new entrants. Barriers to entry make it difficult for other firms to enter into the market. It also restricts competition and aids monopoly. Barriers to competition are often the result of government regulations, and private sector firms frequently find the regulatory burden a major disincentive to doing business and because of this there is a lack of threat of new entrants. Moreover, it facilitates low productivity, low quality of goods or services and higher levels of corruption. “In a well-functioning market where you have effective competition, over time, costs are driven down, product and service quality should rise, the value of output increases, innovation occurs, firms that are inefficient are driven out of the market, and value-adjusted prices fall”(Stonehouse & Snowdon, 2007). Crucially, competition facilitates greater equality of opportunity by breaking down the barriers...
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Retrieved from http://www.budde.com.au/Research/Cuba-Telecoms-Mobile-and-Broadband-Analyses-and-Statistics.html#sthash.xsY80buX.dpuf
Cuba. (n.d) Retrieved from http://www.heritage.org/index/pdf/2014/countries/cuba.pdf
Cuba opens up sale of new, used vehicles. (2013, December 19). Automotive News
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