Entry/Exit Condition: Free: "Free entry and exit", or "no entry barriers" means simply that firms will find there are few difficulties associated with starting a new business in the industry. Factors which make entry into an industry difficult are known as "barriers to entry". Entry barriers include: difficult licensing requirements, the need to acquire patents from competitors, very large capital investments required--especially for specialized equipment or advertising, and excess (unused) capacity by competitors. We will study barriers to entry in more detail in the sections on monopoly and oligopoly.; If entry and exit are free, new firms will enter the industry rapidly if existing firms are profitable, and will exit quickly if profits disappear.