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

Threat of entry are greater in all of the following situations, EXCEPT whenQuestion 5AnswerA.incumbent firms are willing to strongly contest the entry of newcomers with moves designed to make entry unprofitable.B.a large pool of potential entrants exists, some of which have the capabilities to overcome high entry barriers.C.entry barriers are relatively low and buyer demand for the product is growing rapidly, and newcomers can expect to earn attractive profits without inviting a strong reaction from incumbents.D.existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence.E.customers have low brand preferences and low degrees of loyalty to seller

Which of the following conditions generally raise the barriers to entering an industry?Multiple Choicelow levels of brand loyalty on the part of customers and the presence of more than 20 rivals in the industryrapid market growth, low buyer switching costs, and weak brand preferences and customer loyaltyproduct offerings that are pretty much standardized from rival to rivalhigh capital requirements, difficulties in building a network of distributors-retailers and securing adequate space on retailers’ shelves, and the likelihood that industry incumbents will strongly contest the efforts of new entrants to gain a market footholdThe industry is not characterized by scale economies and/or sizable learning or experience curve effects, and few firms in the industry hold key patents and/or possess significant proprietary technology not readily available to a newcomer.

Multiple Choice QuestionCompared with oligopoly and monopoly, entry of new firms into monopolistically competitive industries isMultiple choice question.relatively difficult because average costs are high.relatively easy because firms need to develop differentiated products.relatively difficult because capital requirements are high.relatively easy because firms do not need to advertise.relatively easy because economies of scale are few.

The strength or weakness of the potential entry of rivals as a competitive force isMultiple Choicestrongly correlated with the level of supplier power and with the number of suppliers that may seek to integrate forwards into the industry.contingent upon the strength of buyer loyalty to existing brands.contingent upon whether the industry’s growth and profit prospects are strongly attractive to potential entry candidates.contingent upon whether the strategies of industry members are well matched to the industry’s key success factors.strongly correlated with the degree to which the industry’s driving forces make it harder or easier for new entrants to be successful.

Factors that weaken rivalry among competing sellers includeMultiple Choicelow buyer switching costs.slow growth in buyer demand.rapid growth in buyer demand, high buyer costs to switch brands, and so many industry rivals that any one company’s actions have little impact on the businesses of its rivals.standardized or else weakly differentiated products among rival sellers.the presence of one or more rivals that are dissatisfied with their current position and market share.