Which of the following statements is true regarding new entrants in a market?

The statement that high barriers to entry can discourage new companies is correct.

In markets with high barriers to entry, factors such as significant capital requirements, stringent regulations, strong brand loyalty among consumers, or control over essential resources can prevent new firms from entering the market. These barriers create a challenging environment for potential entrants, often leading existing companies to maintain their market position with less threat from new competitors. Consequently, the presence of high barriers to entry serves as a protective shield for established businesses, allowing them to sustain profitability and market share without the pressure of increased competition from new entrants.

In contrast, the other statements do not accurately reflect the dynamics of market entry. Not all industries experience high barriers to entry, and in markets where barriers are low, competition can indeed increase as new players enter more easily. Additionally, new entrants can pose significant threats to established businesses, especially if they bring innovation, lower prices, or improved products to the market.