Sometimes an old company in an industry can build a larger plant that has lower costs per unit than a potential entrant (newcomer) can duplicate. That is market:
A) weakness based on cost.
B) power based on scale economies.
C) power based on specific assets.
D) weakness based on reputation deficiency.

Question

Quizplus · Accepted Answer

This is an example of power based on scale economies, where the established company has a cost advantage due to their larger plant size and production volume. This makes it difficult for a potential entrant to compete on price and profitability.

Sometimes an Old Company in an Industry Can Build a Larger