When market leaders produce on a mass scale, new entrants:
A)can easily compete.
B)have a hard time competing.
C)have higher switching costs.
D)have lower switching costs.

Question

Quizplus · Accepted Answer

When market leaders produce on a mass scale, they often achieve economies of scale which enable them to produce goods at a lower cost. This makes it difficult for new entrants to compete on price. Additionally, the market leader may have established brand recognition and customer loyalty, making it harder for new entrants to gain market share. Therefore, new entrants usually have a hard time competing with market leaders who produce on a mass scale.

When Market Leaders Produce on a Mass Scale, New Entrants