Final answer:
High barriers to entry in a market can make acquisitions more likely as a strategy for firms to enter the market. This is because acquiring an established firm allows a new entrant to bypass these barriers and gain immediate market presence.
Step-by-step explanation:
Barriers to entry are legal, technological, or market forces that discourage or prevent potential competitors from entering a market. When markets have significant barriers to entry, this can lead to a monopolistic situation or limit competition to a few firms. In such markets, it is not guaranteed that high profits will attract new firms, as these barriers may block entry despite the profit potential.
In the context of barriers to entry, acquisitions as an entry strategy can become more likely because when direct entry is difficult due to high barriers, firms may choose to enter the market through the acquisition of existing firms. Acquiring a firm that has already overcome the barriers to entry allows a new entrant to bypass these barriers and immediately gain market presence.