How did an increase in trade lead to less feudalism and the growth of towns?

Increase in trades provides more opportunities for local towns in finding trading partners that could give them profit as the fruit of their hardwork.
This will make them does not necessarily need to depend on the nobles to bring bread to the table, but also bring more wealth and investments into their town  and improve their economy as a whole.

high entry costs prevent new producers from entering the market.

explanation:

an oligopoly is a term used to clarify the structure of a particular market, industry, or organization. a market is considered oligopolistic or amazingly focused when it is shared between a few companies.