Free Entry

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Free Entry

A situation in which there are no barriers to entry. That is, any seller wishing to bring a product to market may do so with little or no trouble. While free entry is rare in practice, a market is more efficient if there are few barriers to entry because it leaves open the possibility that new competition with lower prices or better products may arrive at any time.
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The free entry condition links the price of equity (the value of products) with marginal cost and markups, and hence with inflation dynamics.