What is a significant barrier to entry for new electricity generators?

The correct answer identifies high up-front fixed costs as a significant barrier to entry for new electricity generators. In the electricity generation sector, entering the market typically requires substantial investment in infrastructure, such as power plants, transmission lines, and equipment. These high fixed costs can deter new competitors from entering the industry because they necessitate a significant amount of capital upfront without any guarantee of immediate returns. This financial burden makes it challenging for smaller or new firms to compete with established companies that have already absorbed these costs and can spread them over larger operations.

In contrast, low demand for electricity does not effectively serve as a barrier to entry; it simply influences the market dynamics. Similarly, while government support can be beneficial for new entrants, a lack of such support may not be a defining barrier when considering the substantial fixed costs of establishing a new electricity generating facility. Lastly, public resistance to new energy sources may complicate regulatory approvals and public acceptance but does not inherently prevent entry into the market as the financial commitment posed by high fixed costs does.