If a firm competes in a capital-intensive industry with excess capacity,all of the following are true except:
A) price increases will be less likely.
B) price increases will be more likely.
C) companies in competitive industries face high exit barriers.
D) companies in competitive industries may experience future price decreases.

Question

Quizplus · Accepted Answer

In a capital-intensive industry with excess capacity, firms are less likely to increase prices because they aim to utilize their excess capacity and avoid losing market share.

If a Firm Competes in a Capital-Intensive Industry with Excess