If Economies of Scale Are an Industry's Primary Entry Barrier,
If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:
A) its inability to counter brand loyalty that customers have for established companies in the industry.
B) the inferior quality of its products.
C) its inability to match the innovation of the established firm.
D) its inability to produce in sufficient volume to match the cost advantages of established producers.
E) its inability to get buyers to switch to its product.
As a barrier to new entry, absolute cost advantages can be based on:
A) continuous advertising of brand and company names, and product innovation achieved through research and development.
B) high product quality, service-oriented innovations, and good after-sales service.
C) cost reductions that arise from the mass production of standardized output.
D) the unique ability of established companies to spread fixed costs over a large volume.
E) superior production operations and processes due to accumulated experience, patents, or trade secrets.
Which of the following is not a result of intense rivalry within an industry?
A) Raised costs
B) Lowered prices
C) Reduced spending on non-price-competitive strategies
D) Threat to profitability
E) None of these are results of intense rivalry within an industry.
Which of the following industry structures is made up of a several small or medium-sized companies, none of which is positioned to determine industry price?
A) Fragmented industry
B) Consolidated industry
E) Monopolistic competition