As an industry enters the shakeout stage,
A) rivalry among companies declines.
B) demand is still growing at a high rate.
C) prices rise.
D) excess capacity emerges.
E) new entrants come into the market.

Question

Quizplus · Accepted Answer

During the shakeout stage, there is typically a decrease in demand growth and an increase in competition, which leads to excess capacity as companies struggle to maintain their market share. This excess capacity often leads to price wars and a further consolidation of the industry as weaker firms exit or are acquired. Therefore, choice D, excess capacity emerges, is the best answer.

As an Industry Enters the Shakeout Stage