Which of the following best explains why zoos are not affected by the threat of new entrants? a: starting a zoo has a high entry cost b: customers do not have a replacement activities c: substitutes for attending the zoo are much lower quality d: the zoo industry is growing rapidly.

The answer would be A, Starting a zoo has a high entry cost.

When you start a business, you always think of providing something unique to your customer which give you an edge over others. But you have a constant treat of the new entrant who can give you a pretty good competition. This treat is present in all businesses. But there are certain businesses in which this treat is very low. And opening a zoo is one of those businesses.

For opening a zoo, a person need to invest a lot of money. Moreover the rate of return from zoo is also minimal. Initially a whole lot of a money is needed to buy a big piece of land. Secondly you will have to purchase unique animals and birds for the zoo. And the prices of animals and birds are too high. A huge amount of money is required to purchase animals and birds for the zoo. Next, you will need to build cages for them. Plus you need to feed the animals. Plus you need a workforce to take care of the animals and birds. In short, there are many things that involve huge amount of money for zoo. So people do not usually go for such a big investment. So for those who have opened up the zoo, there is less threat of new entrant within this business.  

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