Potential Entrants Are More Likely to Be Deterred from Actually

question 92

Multiple Choice

Potential entrants are more likely to be deterred from actually entering an industry when

• A)incumbent firms are willing and able to be aggressive in defending their market positions against entry.
• B)incumbent firms are complacent.
• C)buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals.
• D)the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage.
• E)buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

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Definitions:

Enter Bills

The process in accounting software where incoming invoices from suppliers are recorded ahead of payment.

Purchase Order

A document issued by a buyer to a seller, formalizing the terms of a purchase of goods or services.

Accounts Payable

The amount of money that a company owes to its creditors for goods or services received but not yet paid for.

Expense Account

An account that tracks the costs incurred by a business as part of its operating activities.