In theories of competition in economics, barriers to entry, also known as barrier to entry, are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry - such as government regulation, or a large, established firm taking advantage of economies of scale - or those an individual faces in trying to gain entrance to a profession - such as education or licensing requirements.
Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices. The existence of monopolies or market power is often aided by barriers to entry.
Read more about Barriers To Entry: Definitions, Barriers To Entry For Firms Into A Market, Barriers To Entry For Individuals Into The Job Market, Classification and Examples, Barriers To Entry and Market Structure
Famous quotes containing the words barriers to, barriers and/or entry:
“The principle that human nature, in its psychological aspects, is nothing more than a product of history and given social relations removes all barriers to coercion and manipulation by the powerful.”
—Noam Chomsky (b. 1928)
“... in love, barriers cannot be destroyed from the outside by the one to whom the cause despair, no matter what he does; and it is only when he is no longer concerned with them that, suddenly, as a result of work coming from elsewhere, accomplished within the one who did not love him, these barriers, formerly attacked without success, fall futilely.”
—Marcel Proust (1871–1922)
“When women can support themselves, have entry to all the trades and professions, with a house of their own over their heads and a bank account, they will own their bodies and be dictators in the social realm.”
—Elizabeth Cady Stanton (1815–1902)