The likelihood of new entrants joining an industry is low if existing competitors enjoy economies of scale because:
A) new entrants struggle to match incumbents' prices.
B) this discourages customers from buying a new entrant's offerings.
C) new entrants struggle to gather enough cash to get started.
D) each incumbent has a group of loyal customers that enjoy its unique features.
E) new entrants struggle to get their offerings to customers.

Question

Quizplus · Accepted Answer

Economies of scale allow existing competitors to produce at a lower cost, making it difficult for new entrants to compete on price.

The Likelihood of New Entrants Joining an Industry Is Low