Barriers to entry are obstacles on the way of potential new entrant to enter the market and compete with the other companies. The difficulties of entering a market can shelter the companies against new entrants. Companies' profits are potentially higher than in a truly competitive market, at the expenses of their suppliers and buyers. The higher the barriers to entry, the more power in the hands of the companies. The easier the barries to entry, the less power in the hands of the companies.

external image competing_barriers2entry_4areas_6x4.png
This video is about patents, which can serve as a barrier to entry
if one firm holds a patent.



LINKS
http://www.photopla.net/wwp0503/entry.php
http://www.inc.com/magazine/20011001/23475.html
http://www.1000ventures.com/business_guide/crosscuttings/competing_barriers_to_entry.html

SAMPLE QUESTION
With less barriers to entry, a firm has _ price control (fill in the blank).

ANSWER:

LESS price control