Competitive pressures stemming from the threat of entry are weaker when
A) there are fewer than 20 potential entry candidates and more than 10 firms already in the industry.
B) there are more than 3 entry barriers.
C) the industry outlook is risky or uncertain.
D) incumbent firms have little ability to leverage distributors, dealers, and/or retailers to retain their business.
E) the nature of the industry entails few scale economies.

Question

Quizplus · Accepted Answer

When the industry outlook is risky or uncertain, potential entrants may be deterred from entering due to the unpredictability of returns, thus weakening competitive pressures.

Competitive Pressures Stemming from the Threat of Entry Are Weaker