The risk of entry by potential competitors is a function of the height of barriers to entry.

Question

Quizplus · Accepted Answer

The statement is true. The higher the barriers to entry, the lower the risk of entry by potential competitors. Barriers to entry can include factors such as high capital requirements, government regulations, brand recognition, and economies of scale. The higher the barriers, the more difficult it is for new entrants to compete effectively with established firms in the industry.

The Risk of Entry by Potential Competitors Is a Function