Final answer:
Barriers to entry can protect firms from competition, allowing them to maintain high profits. Perfect competition does not account for these barriers, which can range from simple to extremely restrictive, such as owning all radio frequencies.
Step-by-step explanation:
In markets where there are barriers to entry, it is possible for existing firms to maintain abnormally high profits since these barriers prevent new competitors from entering the market and driving prices down. Perfect competition assumes there are no barriers to entry, which is why any profits above the norm would entice new firms to enter, leading to a reduction in prices and elimination of exceptional profits. However, when barriers to entry exist, such as legal restrictions, technological hurdles, or control over essential resources, these can range from being easily manageable to extremely prohibitive. An example of a restrictive barrier could be a company controlling all available radio frequencies for broadcasting, thus preventing others from entering the market.