The level of entry barriers is only relevant to potential competitors because:
A) Firms that are established in an industry have already overcome the barriers to entry.
B) The existence of high entry barriers has little impact on overall industry profitability.
C) Competitive markets are dynamic, so established firms expect that there will always be new entrants.
D) The level of entry barriers is relevant to both existing and potential firms due to the competitive consequences for both.

Question

Quizplus · Accepted Answer

High entry barriers correspond to high industry and firm profitability. The number of new entrants into an industry has significant competitive implications for existing firms. Entrants are concerned with how difficult it will be to enter an industry.

The Level of Entry Barriers Is Only Relevant to Potential