Companies facing higher exit barriers find it harder to reduce capacity and face a greater threat of severe price competition.

Question

Quizplus · Accepted Answer

Exit barriers refer to the costs and difficulties associated with leaving a particular market or industry. Higher exit barriers make it harder for companies to reduce capacity or exit the industry, which means they may face greater competition and pricing pressures. Therefore, the statement is true.

Companies Facing Higher Exit Barriers Find It Harder to Reduce