BARRIERS TO ENTRY AND THE STABILITY OF MARKET STRUCTURES: A NOTE

PROFESSORS Bain and Mann were puzzled by one result of their investigation of the relationship between entry barriers and profitability. They expected, reasoning from the limit price theory,' to find significant differences among mean rates of return for their three classifications of entry barriers: very high, substantial, and moderate to low. They found a significant difference in mean profitability between the very high barrier group and the other