Product Differentiation by Incumbents Act as an Entry Barrier Because

question 22

Multiple Choice

Product differentiation by incumbents act as an entry barrier because

• A) new entrants cannot differentiate their products.
• B) incumbents will take legal action if new entrants do not differentiate their products.
• C) it helps a firm to derive greater economies of scale.
• D) new entrants will have to spend heavily to overcome existing customer loyalties.

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Definitions:

Dollar Appreciates

An increase in the value of the US dollar relative to other currencies in the global market.

Yen

The official currency of Japan, known for being one of the most traded currencies in the foreign exchange market.

International Exchange

The trading of goods, services, and currencies among countries, allowing for the movement of resources across borders.

Current Account

A component of a country's balance of payments that includes the trade balance, net income from abroad, and net current transfers, reflecting the flow of goods, services, primary income, and secondary income.