What defines 'barriers to entry' in a market?

Barriers to entry are defined as obstacles that make it difficult for new competitors to enter a market. These barriers can take various forms, such as high startup costs, stringent regulations, economies of scale that favor established companies, brand loyalty that entrenches existing firms, access to distribution channels, or the need for significant research and development investment. When these barriers are present, they deter potential new entrants, which helps existing firms maintain their market share and pricing power.

In contrast, factors that enhance competition among existing firms would contribute to a more competitive environment but do not directly describe barriers to entry. Regulations that support new business creation and incentives for new firms to start operations would actually work against the concept of barriers to entry, as they facilitate easier access to the market rather than obstructing it.