If Economies of Scale Are an Industry's Primary Entry Barrier

question 5

Multiple Choice

If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:

• A) its inability to counter brand loyalty that customers have for established companies in the industry.
• B) the inferior quality of its products.
• C) its inability to match the innovation of the established firm.
• D) its inability to produce in sufficient volume to match the cost advantages of established producers.
• E) its inability to get buyers to switch to its product.

---

Definitions:

Prefrontal Cortex

The part of the frontal lobes of the brain involved in decision making, problem-solving, control of purposeful behaviors, consciousness, and emotions.

Phineas Gage

was a railroad worker whose survival of a severe brain injury helped scientists understand more about the brain and personality.

Temporal Lobe

A region of the cerebral cortex involved in processing auditory information, language, and emotional response.

Broca's

Related to an area in the frontal lobe of the dominant hemisphere (usually the left) of the brain, involved in language processing, speech production, and comprehension.