The existence of first mover advantage and the fact that the market is small relative to the minimum efficient scale of production:
A)Are two market imperfections that impact the ability to sustain competitive advantage
B)Are two market imperfections that impact the ability to sustain competitive advantage through preemption
C)Are general attributes of any market
D)Are unrelated

Question

Quizplus · Accepted Answer

First mover advantage and small market size are two market imperfections that impact the ability to sustain competitive advantage through preemption, as the first mover may preempt the market and deter potential entrants, but the small market size limits the ability to achieve economies of scale, making it difficult for the first mover to sustain its advantage.

The Existence of First Mover Advantage and the Fact That