Free entry is a term used by economist

Economist

An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

s to describe a condition in which firms can freely enter the market

Market

A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...

 for an economic good by establishing production and beginning to sell the product.

Free entry is implied by the perfect competition

Perfect competition

In economic theory, perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets...

 condition that there is an unlimited number of buyers and sellers in a market. In comparison to perfect competition, however, free entry is a condition often more applicable to real world conditions. To see this, suppose there is a good which not many people want, which is produced by only one firm. In this situation, there is not perfect competition. However, if there is free entry, the market is likely to be more efficient than if there is not. If the monopoly

Monopoly

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 firm raises its prices too high, another firm could enter the market and take its customers. According to this reasoning, where there is free entry the economic damage caused by monopoly

Monopoly

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 behavior may be mitigated.

Barriers to entry

Numerous barriers to entry

Barriers to entry

In theories of competition in economics, barriers to entry are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry - such as government regulation, or a large, established firm taking advantage of economies...

 could exist that restrict free entry:

• A resource
  Natural resource
  Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
  
   is owned by a single firm. For instance, one business might control the only well for clean water in a region.
• The government
  Government
  Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
  
   might grant a single firm a monopoly. For instance, the state might bar competition to a state owned utility company. Alternatively, one business might possess a legal patent or copyright on a certain good.
• The structure of the market or the production process might make a single producer most efficient - this is called a natural monopoly
  Natural monopoly
  A monopoly describes a situation where all sales in a market are undertaken by a single firm. A natural monopoly by contrast is a condition on the cost-technology of an industry whereby it is most efficient for production to be concentrated in a single form...
  
  .