Final answer:
The primary barrier to entry is 'economies of scale,' which allows firms to produce at lower costs as they increase output, deterring new entrants who cannot compete at these lower costs.
Step-by-step explanation:
The most important barrier to entry is economies of scale, which exists when a firm's long-run average costs fall as the firm increases output. Economies of scale occur when increasing the scale of production leads to a lower cost per unit of output. This can deter new competitors from entering the market if they cannot match the low costs of established firms. Conversely, diseconomies of scale refer to a situation where the long-run average cost of producing output increases as total output increases. This often happens when a firm becomes too large, resulting in high managerial costs and inefficiencies. Notably, in some planned economies such as the old Soviet Union, even grossly inefficient plants could persist due to government protection against competition.