Barriers to entry

In theories of competition in economics, a barrier to entry, or economic barrier to entry, is a cost that must be incurred by a new entrant into a market that incumbents don't or haven't had to incur.

Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices and are therefore are most important when discussing antitrust policy. Barriers to entry often cause or aid the existence of monopolies or give companies market power.