Which of the following statements correctly describes potential competitors in an industry?
A) They threaten the profitability of established companies.
B) They are usually encouraged by established companies.
C) They find it easier to enter an industry when the entry barriers are high.
D) They find it easier to enter an industry when established companies have economies of scale.
E) They usually have an absolute cost advantage over established companies.

Question

Quizplus · Accepted Answer

Potential competitors threaten the profitability of established companies by increasing competition, which can lead to price reductions, higher costs associated with attracting and retaining customers, and the need for continuous innovation to maintain market share.

Which of the Following Statements Correctly Describes Potential Competitors in an Industry