Final answer:
A barrier to entry can take many forms, such as superior technological knowledge, patents, or well-established brand names, all of which hinder new competitors from entering a market. Legal restrictions and control of essential resources can establish formidable barriers, possibly leading to monopolies or oligopolies where new entrants cannot easily compete.
Step-by-step explanation:
An example of a barrier to entry is superior technological knowledge.
Barriers to entry are obstacles that make it difficult for new firms to enter a market. These can include legal restrictions like patents and copyrights, control of resources, economies of scale, and strategic practices such as predatory pricing. For example, a government-enforced barrier to entry is a patented invention because it legally prevents others from using the patented technology or process without permission. A barrier to entry that is not government-enforced could be a well-respected brand name built over years, which new competitors cannot easily replicate. On the other hand, situations not involving barriers to entry might be an industry where economies of scale are small compared to market demand, allowing easy entry. Moreover, significant barriers do not always guarantee new firms will enter a market in response to high profits, particularly if these barriers lead to monopolies or limited competition.