Which of the following statements is accurate?

Question

Quizplus · Accepted Answer

Firms with a low-cost position can reduce the threat of rivalry in an industry because they can afford to lower prices and still make a profit. This makes it difficult for competitors to match their prices and maintain profitability, reducing the threat of intense rivalry. Choice A is incorrect because a cost-leadership strategy can actually increase barriers to entry by making it difficult for new entrants to compete on price. Choice C is incorrect because cost leaders may actually be less vulnerable to substitute products because their low prices create customer loyalty. Choice D is incorrect because cost leaders often have more bargaining power with suppliers because they are able to order larger quantities and negotiate lower prices.

Which of the Following Statements Is Accurate