Which of the following statements is true about potential competitors in an industry?
A) They threaten the profitability of established companies.
B) They are usually encouraged by established companies.
C) They find it easier to enter an industry when the entry barriers are high.
D) They find it easier to enter an industry when established companies have economies of scale.
E) They usually have an absolute cost advantage over established companies.

Question

Quizplus · Accepted Answer

Potential competitors are a threat to the profitability of established companies because they may enter the market and take away market share and customers, which could lead to decreased profits for established companies.

Which of the Following Statements Is True About Potential Competitors