_____ keep firms in an industry and thus can exert downward pressure on profits.
A) Barriers to entry
B) Exit barriers
C) Mobility barriers
D) Survival barriers

Question

Quizplus · Accepted Answer

Exit barriers refer to the obstacles that prevent firms from leaving an industry. These can include contractual obligations, specialized assets, or emotional attachment to the industry. When these barriers are high, it is more difficult for firms to exit the industry and therefore there are more firms competing, which can result in downward pressure on profits. Barriers to entry, on the other hand, refer to obstacles that prevent new firms from entering the industry, and mobility barriers and survival barriers are not commonly used terms in this context.

_____ Keep Firms in an Industry and Thus Can Exert