Question

What is a barrier to entry? Give some examples.

Short answer

The barrier to entry means obstacles faced by firms to enter the market,

it can impose by existing firms or the government.

Step-by-step solution

Step 1. Meaning

Barriers are obstacles that make it very difficult to enter a given market, barriers to entry can be imposed by two means either by existed firm or taxation by the government.

Barrier entry includes:

Government regulations

Strong brand identity

Customer loyalty

Patent protection

Licensing requirement

Step 2. example

A company gets a patent for product X for five years means, that no other seller can sell that product X.