New entrants to an industry are more likely when:

• A. government regulations are strict
• B. start-up costs are very high
• C. existing firms have significant market power
• D. barriers to entry are low

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'barriers to entry' in microeconomics, which are obstacles that make it difficult for new firms to enter an industry.
2. Analyze each option given: strict government regulations, high start-up costs, and existing firms with significant market power all represent high barriers to entry.
3. Recognize that when barriers to entry are high, new entrants are less likely to enter the market because it is costly or difficult to compete.
4. Conclude that new entrants are more likely to enter an industry when barriers to entry are low, meaning fewer obstacles such as low start-up costs, minimal regulations, and less dominant existing firms.
5. Summarize that the correct answer is 'barriers to entry are low' because this condition facilitates easier market entry for new firms.