Which of the Following Statements Is True About Government Regulations

question 53

Multiple Choice

Which of the following statements is true about government regulations in the context of entry barriers of an industry?

• A) Government deregulation in an industry results in significant reduction in competition.
• B) Government regulation is not a major entry barrier for any industries.
• C) Falling entry barriers due to government deregulation results in higher competition and lower industry profit rates.
• D) The threat of new entrants reduces when the government deregulates an industry.
• E) Companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation.

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Definitions:

Frito-Lay's

A subsidiary of PepsiCo that manufactures and sells a wide range of snack foods including chips and crisps.

Licensing

Involves granting permission to an individual or entity to use intellectual property, such as patents, trademarks, or technology, under agreed terms and conditions.

Low-Risk

Pertains to investments or decisions that have a relatively small chance of resulting in financial loss or negative outcomes.

Local Manufacturing

The production of goods within a specific geographic region, typically emphasizing the benefits of reduced transport costs, supporting local economies, and minimizing environmental impact.