When Are Sunk Costs a Most Effective Entry Barrier

question 5

Multiple Choice

When are sunk costs a most effective entry barrier?

• A)When the incumbent has incurred them and the entrant has not
• B)When incumbents have long-standing relationships with suppliers and customers
• C)When channels are few and hard to replicate
• D)When a firm has a reputation for toughness or competes in multiple markets
• E)When marginal costs are low and flooding the market causes large price reductions

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Definitions:

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