Barriers To Entry
Numerous barriers to entry could exist that restrict free entry:
- A resource is owned by a single firm. For instance, one business might control the only well for clean water in a region.
- The government might grant a single firm a monopoly. For instance, the state might bar competition to a state owned utility company. Alternatively, one business might possess a legal patent or copyright on a certain good.
- The structure of the market or the production process might make a single producer most efficient - this is called a natural monopoly.
Read more about this topic: Free Entry
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)
“The barriers of conventionality have been raised so high, and so strangely cemented by long existence, that the only hope of overthrowing them exists in the union of numbers linked together by common opinion and effort ... the united watchword of thousands would strike at the foundation of the false system and annihilate it.”
—Mme. Ellen Louise Demorest 1824–1898, U.S. women’s magazine editor and woman’s club movement pioneer. Demorest’s Illustrated Monthly and Mirror of Fashions, p. 203 (January 1870)
“All mothers need instruction, nurturing, and an understanding mentor after the birth of a baby, but in this age of fast foods, fast tracks, and fast lanes, it doesn’t always happen. While we live in a society that provides recognition for just about every life event—from baptisms to bar mitzvahs, from wedding vows to funeral rites—the entry into parenting seems to be a solo flight, with nothing and no one to mark formally the new mom’s entry into motherhood.”
—Sally Placksin (20th century)