These are direct or indirect limits or restrictions on the

Barriers To Market Entry edit

These are direct or indirect limits or restrictions on the ability of potential suppliers to enter a particular market. These restrictions operate to prevent efficient new entrants from coming into a market and offering further choice to buyers. A market with such barriers to entry may see existing suppliers (known as incumbents) protected from competition and the threat of competition. This resulting lack of competitive pressure can lead to serious adverse effects on buyers, as incumbents may be able to charge higher prices, offer lower quality services and offer less choice. This protection may also mean there is less incentive for incumbents to innovate and to respond to the needs of buyers.

Entry barriers to a market may arise naturally, because of the peculiar aspects of an industry that make successful entry difficult, such as difficulties in establishing a reputation. Entry barriers may also arise directly from actions taken by incumbent suppliers that make entry more difficult. For example, incumbents may raise the costs to buyers of switching to a new entrant. Regulations limiting who may operate in a particular market create direct barriers to entry.

Regulatory barriers can operate to deny buyers choice and protect incumbents from any threat of competition without correcting any market failure. In particular, quantitative entry restrictions (where there are direct limits on the number of suppliers).
competition

Dublin

2 February 2011