Potential entrants are more likely to be deterred from actually entering an industry when
A) incumbent firms have previously been aggressive in defending their market positions against entry.
B) incumbent firms are complacent.
C) buyers are not particularly price sensitive and the industry already contains a dozen or more rivals.
D) the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage.
E) buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

Question

Quizplus · Accepted Answer

If incumbent firms have a history of aggressively defending their market positions against new entrants, potential entrants are more likely to be deterred from entering the industry. This is because they may face significant barriers to entry, such as high capital requirements or established distribution networks, which could deter potential entrants from investing in the industry.

Potential Entrants Are More Likely to Be Deterred from Actually