Question

Government rules, taxation, environmental regulations etc. are examples of which barrier to entrepreneurship?

• A. Employee related difficulties
• B. Lack of entrepreneurial capacity
• C. Market entry regulations
• D. Storage of funds and resources

Hint:

Always analyze whether a barrier is internal (like skill or funding) or external (like regulations); this helps categorize it accurately.

Answer 1

The Correct Option is C

Barriers such as government rules, taxation policies, licensing requirements, and environmental regulations fall under the category of Market Entry Regulations. These are external administrative or legal challenges that businesses must navigate before beginning operations.
Market entry regulations may include:

• Complex registration and licensing procedures.
• High compliance costs related to taxation and environmental laws.
• Regulatory uncertainty and bureaucratic delays.

Such regulations can delay or discourage entrepreneurs from starting new ventures, especially in countries with high levels of red tape or unclear policy frameworks.
Explanation of Other Options:

• (A) Employee related difficulties: Concerns issues like skill gaps, labor availability, or training needs.
• (B) Lack of entrepreneurial capacity: Refers to internal factors like insufficient skills, risk appetite, or innovation.
• (D) Storage of funds and resources: Refers to financial and resource constraints, not policy barriers.