Durodoll is a leading manufacturer of decorative crafts in Canada. Which of the following, if true, will indicate that the threat of new entrants is high for Durodoll?
A) Durodoll has a patent for its manufacturing process.
B) The crafts that Durodoll manufactures are low-priced commodities.
C) The process of manufacturing the crafts is labor intensive.
D) The decorative goods' industry is capital intensive.

Question

Quizplus · Accepted Answer

If the crafts that Durodoll manufactures are low-priced commodities, it indicates that there may not be a significant barrier to entry for new companies to enter the market and manufacture similar products, leading to higher competition for Durodoll. The other options, such as having a patent, a labor-intensive process, or a capital-intensive industry, may act as barriers to entry for new entrants, reducing the threat to Durodoll's market share.

Durodoll Is a Leading Manufacturer of Decorative Crafts in Canada