Which of the following would not diminish the risk of entry of potential competitors for an established company within an industry?
A) Government prohibition of market entry in the company's industry.
B) Consumers prefer the established company's product.
C) Potential competitors cannot match the established company's lower cost structure.
D) The established company does not benefit from cost reductions due to mass production of standardized products.
E) Customers are locked into the established company's product due to the high amount of energy, time, and money it would take to switch to a new product.

Question

Quizplus · Accepted Answer

The option D would not diminish the risk of entry of potential competitors since the established company does not benefit from cost reductions due to mass production of standardized products. This would not create a barrier to entry for potential competitors, thereby not diminishing the risk of entry. All the other options are factors that would decrease the risk of entry for potential competitors.

Which of the Following Would Not Diminish the Risk of Entry