What generally limits the entry of new firms in an oligopolistic market?

In an oligopolistic market, the presence of a few dominant firms typically results in high barriers to entry that limit the ability of new firms to enter the market. These barriers can take various forms, including substantial capital requirements, economies of scale enjoyed by established firms, strong brand loyalty, and various regulatory and legal obstacles.

When existing firms have invested heavily in infrastructure, technology, or marketing, it becomes challenging for new entrants to compete effectively without significant initial investment, often deterring them from entering the market entirely. Additionally, successful oligopolists may engage in strategies such as price wars or aggressive advertising to maintain their market power, further discouraging potential competitors from attempting to enter.

The other options do not represent the primary constraints on new firms in an oligopoly. While common knowledge and market demand can affect competition, they are not direct barriers to entry. Low fixed costs might facilitate entry into some markets, but in oligopolistic settings, it is often the high barriers that are the more defining characteristic hindering new competition.