Final answer:
The factor that is not considered a barrier to entry is an inelastic demand for a product, revealing that not all measures that might affect market competition constitute barriers to entry. Legally enforced patent rights, licensing, and control over essential resources, however, represent significant barriers.
Step-by-step explanation:
The factor that is not a barrier limiting the entry of potential competitors into a market is an inelastic demand for a product. Other choices such as legally enforced patent rights, licensing, and control over an essential resource, like owning a source of very pure water or having a well-known trademark, act as barriers to entry.
Here's how to classify various situations regarding barriers to entry:
- A patented invention is a government-enforced barrier to entry because it legally protects an inventor's rights to their creation.
- A popular but easily copied restaurant recipe does not involve a government-enforced barrier to entry, as it can be replicated unless it's protected by a trademark or copyright.
- An industry where economies of scale are very small compared to the size of demand in the market generally does not involve barriers to entry, as new competitors can enter without facing significant cost disadvantages.
- A well-established reputation for slashing prices or a well-respected brand name are not government-enforced barriers. They are competitive advantages that may naturally deter entry.
Legal restrictions, such as licenses or safety tests, and control over resources are clear examples of barriers that can prevent new competitors from entering a market and possibly creating a monopoly.