What is a common example of a barrier to entry?

Established brand loyalty in the market serves as a significant barrier to entry because it creates a competitive advantage for existing companies. When consumers have a strong preference for certain brands, new entrants may find it challenging to attract customers, regardless of the quality or price of their products. Established brands often benefit from consumer familiarity, trust, and perceived quality, making it difficult for newcomers to gain a foothold in the market without substantial marketing efforts and resources.

The other options, while they may impact the market dynamics, do not function as typical barriers to entry in the same way. Low consumer demand could hinder overall business performance but does not directly impede a new company from entering the market. Government subsidies for new businesses typically lower barriers, encouraging entry rather than restricting it. High availability of raw materials would generally facilitate entry by making it easier for new businesses to source their supplies, rather than presenting an obstacle.