Potential entrants are more likely to be deterred from actually entering an industry when
A)incumbent firms are willing and able to be aggressive in defending their market positions against entry.
B)incumbent firms are complacent.
C)buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals.
D)the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage.
E)buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

Question

Quizplus · Accepted Answer

When incumbent firms are willing and able to be aggressive in defending their market positions against entry, potential entrants are more likely to be deterred from entering the industry. This can be done by using tactics like price undercutting, product differentiation, brand recognition, and customer lock-ins. As a result, potential entrants may perceive the industry as having high entry barriers and may decide not to enter.

Potential Entrants Are More Likely to Be Deterred from Actually