Which of the following DOES NOT reflect an example of the impact a new entrant might have on an industry?
A) A new entrant might take away market share from existing competitors.
B) A new entrant might increase production capacity in the industry so that overcapacity results.
C) A new entrant might force existing firms to learn new ways of doing things.
D) A new entrant might decrease competitive rivalry.

Question

Quizplus · Accepted Answer

The statement "A new entrant might decrease competitive rivalry" is incorrect because the entry of a new firm typically increases competitive rivalry in an industry, as existing firms may have to lower their prices or improve their products to compete with the new entrant. Therefore, option D does not reflect an example of the impact a new entrant might have on an industry. Options A, B, and C are all examples of potential impacts that a new entrant could have on an industry.

Which of the Following DOES NOT Reflect an Example of the Impact