High exit barriers are factors that cause a company to remain in an industry even though the profitability of doing may be questionable.

Question

Quizplus · Accepted Answer

High exit barriers, such as high fixed costs, specialized assets, and long-term contracts, make it difficult and costly for companies to leave an industry, even if profitability is low. Hence, companies may choose to remain in the industry despite the challenges.

High Exit Barriers Are Factors That Cause a Company to Remain