What kind of market is characterized by a relatively small number of sellers and high entry risks?

A market characterized by a relatively small number of sellers and high entry risks is known as an oligopoly. In this market structure, a few firms dominate the industry, leading to significant control over prices and output. Due to the limited number of competitors, each seller has a substantial influence on market conditions.

Entry into an oligopolistic market is often hindered by high barriers to entry, which can include significant capital requirements, economies of scale, and regulatory challenges. These barriers make it difficult for new firms to enter the market and compete, reinforcing the market power of the existing firms.

In contrast, a monopoly involves a single seller that dominates the market, offering no competition. Perfect competition describes a market with many sellers offering identical products, leading to no individual firm having any price control. A free market generally refers to an economic system with minimal government intervention, which can encompass various market structures, including oligopolies, but does not specifically denote low competition or high entry risks.

Thus, an oligopoly is the correct characterization for a market with a few sellers and significant entry challenges.