Barriers to entry

Definition

Barriers to entry are obstacles that make it difficult or costly for new firms to enter a market and compete with existing businesses. These can include legal requirements, high startup costs, or access to technology.

Related terms

Market Monopoly: A situation where a single firm controls the entire market for a product or service, often resulting from high barriers to entry.

Economies of Scale:

The cost advantage achieved by an increase in production, allowing larger firms to produce goods at a lower cost per unit than smaller competitors.

Regulatory Licensing: Government-imposed requirement that one must obtain permission before entering certain businesses or professions, serving as a barrier to entry