Common exit barriers include:
A) minimal investment in assets like specific machines.
B) emotional attachments to an industry.
C) low fixed costs associated with leaving an industry.
D) the lack of bankruptcy regulations.
E) economic independence of a company

Question

Quizplus · Accepted Answer

Emotional attachments to an industry can be a significant barrier to exit. This can be due to factors such as a family history in the industry, personal passion for the product or service, or fear of failure and loss of prestige. These emotional ties can make it difficult for a company to exit an industry even if the financials suggest it would be the best decision.

Additional Note: A, C, and E are actually examples of factors that could make it easier to exit an industry with minimal sunk costs or overhead expenses. D is not a common exit barrier since most industries have bankruptcy regulations, which can actually be an avenue for companies to exit when facing financial obstacles.

Common Exit Barriers Include